Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed sales. The law entitles you to acquire a copy of your completed appraisal report from your lender after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Market value will always be similar to the assessed value of the property.
Fact: It might be that Florida, like most states, supports the idea that the assessed value is no different from the market value; however, this is not often the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended time.
Myth: The value of a home will vary depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to reconstruct a home in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the cost of a property.
Fact: Appraisers make an exhaustive analysis of all factors pertaining to the price of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: As properties increase their worth by a certain percentage - in a strong economic state - the houses around the appreciating properties are expected to increase by the same amount.
Fact: All increase of price is on a case-by-case basis, concluded by data on relevant considerations and the data of comparable houses. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Broward County or Weston/Ft. Lauderdale, FL?Contact DANIEL I KANDEL
Myth: The home's outside is determinate of the actual price of the property; there is no need to do an interior inspection.
Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just viewing the house from the exterior.
Myth: Since you're the one paying for the appraisal when applying for your loan to purchase or refinance real estate, you own the ordered appraisal.
Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the appraisal. However, consumers must be supplied with a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the requirements of their lending agency.
Fact: It is a very good idea for home buyers to go through a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, filled with useful and often-revealing 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: There is no reason to order an appraisal unless you are trying to get an assessment of the cost of a property during a sales transaction involving a lending institution.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you order a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal. The purpose of an appraisal is to form an opinion of fair market value during the appraisal process and the completion of the report. A home inspector assesses the condition of the house and its main components and reports their findings.