Appraisal myths debunked
By law, an appraiser is required to be state-licensed to perform appraisals for federally-backed purchases. You are also entitled by law to request a copy of the completed appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value should equate to market value.
Fact: It is probable that Louisiana, like most states, validates the common myth that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Usually when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the area have not been reassessed for years or more, it may vary wildly.
Myth: The opinion of value of a home will vary depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: The replacement cost of the house is always is on par with the market value.
Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. Replacement value is the dollar amount required to rebuild a home in-kind.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the worth of a home.
Fact: There are many numerous calculations that an appraiser will use to make an in-depth investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable homes.
Myth: When the economy is robust and the worth of homes are reported to be appreciating by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.
Fact: All increase of price is on a case-by-case basis, found by data on relevant conditions and the data of comparable homes. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Jefferson County or Metairie, LA?Contact Crescent Appraisal Group, Inc.
Myth: The home's exterior is determinate of the actual worth of the property; there is no need to do an interior appraisal.
Fact: There are a multitude of different factors that determine property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just viewing the home from the outside.
Myth: Since you're the one paying for the appraisal report when applying for your loan to buy or refinance real estate, you own the ordered appraisal.
Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given one by their lending agency.
Myth: There's no need for consumers to even care about what the appraisal contains so long as their lending agency is satisfied.
Fact: Only if home buyers look over a copy of their appraisal 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, as 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the price of a home during a sales transaction involving a lending institution.
Fact: Depending upon their qualifications and designations, appraisers can and will provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection has a completely different purpose than an appraisal. The appraiser forms an opinion of value in the appraisal process and resulting report. The point of a home inspector is to find the condition of the home and its main components, then provide a report on these conclusions.