Common myths about appraising
It is enforced by law that an appraiser must be state-licensed to produce appraisals for federally-supported property sales in Pennsylvania. The law gives you the right to acquire a copy of your finished report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Usually when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary wildly.
Myth: The opinion of value of a house will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no personal interest in the result of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is established, it should be similar to the replacement cost of the house.
Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a property without being under pressure from any outside group to buy or sell. If the property were rebuilt, the dollar amount needed to do so would make up the replacement cost.
Myth: Certain methods, like the price per square foot of the property, are what appraisers use to come to the cost of a house.
Fact: There are many differing ways that an appraiser will use to make a full investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable houses.
Myth: In a strong economy - when the sales prices of houses in a given area are reported to be appreciating by a certain percentage - the costs of individual properties in the proximity can be expected to increase by that same percentage.
Fact: Any worth at which an appraiser concludes concerning a particular home is always personalized, based on certain factors derived from the information of comparable homes and other considerations within the property itself. It makes no difference whether the economy is robust or poor.
Have other questions about appraisers, appraising or real estate in Allegheny County or Pittsburgh, PA?Contact Nordquist Appraisal LLC
Myth: Just looking at what the home looks like on its exterior gives an idea of its value.
Fact: To conclude an accurate value beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by inspecting the house from the exterior.
Myth: Considering that the consumer is the person who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the appraisal. However, consumers have to be provided with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal document 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 double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, since it contains a great deal of information - including, but not limited to 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 proximity.
Myth: The only reason someone would order an appraisal is if a property needs its worth estimated in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is the same as a home inspection.
Fact: Appraisal reports are completely different than a home inspection report. The point of an appraisal is to form an opinion of fair market value during the appraisal process and the production of the report. A home inspector determines the condition of the home and its major components and reports these findings.