Appraisal myths & facts
Legally, a real estate appraiser needs to be state certified to perform substantiated appraisal reports for federally-backed sales. Also by law, you are entitled to request a copy of the finished appraisal from your lending agency. Contact DANIEL I KANDEL if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser should be exactly the same as the market value.
Fact: It is possible that Florida, like most states, validates the suggestion that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby properties are prime examples of why there might be a differential in price.
Myth: The appraised value of a home will be different depending upon if the appraisal is conducted for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is written.
Myth: The replacement value of the house should be is on par with the market value.
Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. Replacement cost is the dollar amount necessary to rebuild a home in-kind.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the cost of a house.
Fact: Appraisers complete a comprehensive analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.
Myth: When the economy is robust and the value of homes are reported to be increasing by a certain percentage, the other properties in the proximity can be expected to increase based on that same percentage.
Fact: Any value at which an appraiser arrives concerning a particular property is always personalized, based on certain factors derived from the information of comparable properties and other considerations within the property itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Broward County or Weston/Ft. Lauderdale, FL?Contact us
Myth: Just looking at what the house looks like on the outside gives an idea of its value.
Fact: Home value is determined by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data necessary.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their property, they legally own their appraisal report.
Fact: Legally, the document is owned by the lending company unless the lender relinquishes their interest in the report. However, consumers have to be supplied with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it meets the needs of their lending agency.
Fact: A consumer should definitely inspect their appraisal; there will probably be some questions or some concerns with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, containing useful and often-revealing data - 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 hire an appraiser is if a house needs its cost estimated in a lender sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a variety of different services including - but definitely 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: An appraisal does not serve the same purpose as an inspection report. An appraiser concludes on an opinion of value in the appraisal process and resulting document. The task of a home inspector is to find the condition of the property and its major components, then produce a report on these findings.