Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed sales. Also by law, you have the right to receive a copy of the finished appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Market value must be equivocal to the assessed value of the property.
Fact: It could be that Pennsylvania, like most states, supports the idea that the assessed value equates to the market value; however, this is not always true. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: The value of a house will vary depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The cost of the property does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the cost of the house. This means that he will render task with impartiality and independence regardless for whom the appraisal is provided.
Myth: Market value should approximate replacement cost.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a property without being under influence from any external group to purchase or sell. Replacement cost is the dollar amount needed to reconstruct a house in-kind.
Myth: There are specific ways that appraisers use to determine the opinion of value of a house, like the price per square foot.
Fact: There are many varied methods that an appraiser will use to make a full analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable houses.
Myth: As homes appreciate by a specific percentage - in a strong economic state - the houses in proximity are expected to appreciate by the same amount.
Fact: Value appreciation of a certain home has to be concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Allegheny County or Pittsburgh, PA?Contact Nordquist Appraisal LLC
Myth: You can often tell what a property is worth simply by looking at the exterior.
Fact: House worth is concluded by a number of variables, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just examining the property from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to buy or refinance real estate, you own the ordered appraisal report.
Fact: Unless a lender releases its interest in the document, it is legally owned by the lending agency that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be given it by their lending agency.
Myth: Consumers need not be concerned with what is in their appraisal report so long as it exceeds the needs of their lending agency.
Fact: Only if home buyers check out a copy of their report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an appraisal that can be useful to the consumer in the future, such as the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the vicinity.
Myth: The only reason someone would hire an appraiser is if a property needs its worth assessed in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is no different than a home inspection report.
Fact: Appraisal reports are definitely not the same as a home inspection report. The job of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the property and its major components and reports their findings.