Appraisal myths debunked

It is enforced by legal agencies that an appraiser must be state-licensed to write appraisal reports for federally-supported property sales in New York. You also have the right to receive a copy of the finished report from your lending agency. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value generally will be similar to to market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended time.

Myth: Depending on if the appraisal is done for the buyer or the seller, the appraised value of the property will vary.

Fact: The appraiser has no vested interest in the outcome of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: The replacement cost of the property should be is on par with the market value.

Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a property without being under pressure from any outside group to purchase or sell. The dollar amount demanded to reconstruct a home is what constitutes the replacement cost.

Myth: Specific formulae, such as the price per square foot of the property, are what appraisers use to come to the value of a home.

Fact: There are many different ways that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.

Myth: As properties increase their worth by a specific percentage - in a strong economic state - the houses within the same neighborhood are expected to appreciate by the same amount.

Fact: Value increase of a certain house is always concluded on a case-by-case basis, factoring in data on comparable homes and other relevant elements. This is true in strong economic times as well as poor.

Have other questions about appraisers, appraising or real estate in Queens County or Jamaica Estates, NY?

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Myth: Just seeing what the home looks like on its exterior gives a good idea of its worth.

Fact: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information necessary.

Myth: Because the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Because of the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be given one by their lender.

Myth: Home buyers need not care about what is in their appraisal so long as it satisfies the necessities of their lending institution.

Fact: Only if consumers check out a copy of their appraisal 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. An appraisal can double as a record for the future, since it contains an exorbitant amount of information - including, but certainly 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 area.

Myth: Appraisers are hired only to estimate building values in house sales involving mortgage-lending transactions.

Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: An appraisal report is the same as a home inspection report.

Fact: A home inspection serves a completely different purpose than an appraisal. An appraiser forms an opinion of value in the appraisal process and resulting report. A home inspector determines the condition of the home and its major components and reports these findings.