Appraisal myths debunked
It is required by legal agencies that a real estate appraiser must be state-licensed to create appraisals for federally-supported real estate transactions in Louisiana. Also by law, you are entitled to demand a copy of the finished appraisal report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser will be equivalent to the market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby properties are prime examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the cost of the house will vary.
Fact: The appraiser has no personal interest in the outcome of the appraisal report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is found, it should be the same as the replacement cost of the home.
Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. The replacement cost is the dollar amount needed to rebuild a home in-kind.
Myth: Specific formulae, like the price per square foot, are the ways appraisers use to arrive at the price of a home.
Fact: There are many varied ways that an appraiser will use to make a comprehensive analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable homes.
Myth: As properties increase their worth by a certain percentage - in a robust economy - the houses within the same neighborhood are figured to increase by the same amount.
Fact: Worth appreciation of a specific house must be determined on an individualized basis, factoring in information on comparable properties and other relevant considerations. It makes no difference whether the economy is excellent or terrible.
Have other questions about appraisers, appraising or real estate in Jefferson County or Metairie, LA?Contact us
Myth: Just seeing what the house looks like on the outside gives an excellent idea of its worth.
Fact: Property value is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by inspecting the home from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance their house, they legally own their appraisal.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Home buyers have to be supplied with a copy of the report upon written request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their document so long as it meets the needs of their lending institution.
Fact: Only if consumers read a copy of their appraisal report can they double-check 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, containing a great deal 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: There is no reason to order an appraisal unless you are trying to get an assessment of the cost of a house during a sales transaction involving a lending institution.
Fact: Based upon their qualifications and designations, appraisers can and will perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal. The job of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. The job of a home inspector is to approximate the condition of the house and its major components, then produce a report on their inspection.