Common myths about appraising
It is mandated by the government that an appraiser needs to be state-licensed to create appraisals for federally-related real estate transactions in Louisiana. The law gives you the right to acquire a copy of your finished appraisal from your lending agency after it has been provided. Contact us if you have any questions about the appraisal process.
Myth: Market value needs to be the same as the assessed value of the property.
Fact: While most states back the concept that assessed value equates estimated market value, this often is not the case. At times when interior remodeling has been done and the assessor is unaware of the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller sometimes may have leverage in the value of the property depending upon for whom the appraiser is working.
Fact: The opinion of value of the property does not affect the pay of the appraiser; as a result, the appraiser has no preconceived interest in the opinion of value of the property. This means that he will complete his task with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value will approximate replacement cost.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under pressure to buy or sell. If the home were rebuilt, the dollar amount necessary to do so would form the replacement cost.
Myth: There are specific methods that real estate appraisers use to determine the cost of a home, like the price per square foot.
Fact: There are many varied calculations that an appraiser will use to make a comprehensive investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable homes.
Myth: In a powerful economy - when the sales prices of houses in a given county are reported to be increasing by a particular percentage - the worth of individual properties in the vicinity can be expected to increase by that same percentage.
Fact: All appreciation of worth is on a case-by-case basis, concluded by information on relevant considerations and the data of comparable properties. This is true in excellent economic times as well as poor.
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Myth: The home's exterior is determinate of the actual worth of the home; it is unnecessary to do an interior appraisal.
Fact: There are a number of different variables that determine property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just examining the house from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to buy or refinance your house, you own the provided appraisal report.
Fact: Legally, the report is owned by the lending company unless the lender relinquishes their interest in the document. Consumers must be supplied with a version of the document through request because of the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal document so long as it satisfies the needs of their lending institution.
Fact: Only if consumers look over a copy of their report can they verify 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 report can serve as a record for the future, since it contains an incredible amount 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: Appraisers are hired only to estimate building values in house sales involving mortgage-lending deals.
Fact: Ordering an appraisal can fulfill a variety of needs 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: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting document. The job of a home inspector is to find the condition of the house and its main components, then produce a report on these inspection.