Appraisal myths debunked
It is required by legal agencies that a real estate appraiser needs to be state-licensed to offer appraisals for federally-related property purchases in Tennessee. You have the ability to request a copy of the finished appraisal from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Assessed value generally will be equal to market value.
Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this commonly is not the case. Usually when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for quite a while, it may vary wildly.
Myth: The buyer or the seller may have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome of the appraisal report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value 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 likely pay a willing seller for a property without being under duress from any external party to buy or sell. The dollar amount demanded to reconstruct a house is what forms the replacement cost.
Myth: There are specific methods that real estate appraisers use to find the value of a house, such as the price per square foot.
Fact: Appraisers complete a full analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: As properties increase their worth by a certain percentage - in a robust economy - the houses nearby are expected to appreciate by the same amount.
Fact: Any price at which an appraiser concludes in regards to a certain property is always individualized, based on certain factors derived from the data of comparable properties and other considerations within the house itself. This is true in fair economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Madison County or Jackson, TN?Contact us
Myth: You can generally find what a house is worth simply by looking at the outside.
Fact: House value is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived simply by inspecting the home from the outside.
Myth: Considering that the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Legally, the report is owned by the lender unless the lender releases their interest in the appraisal. However, consumers must be provided with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even care about what the report contains so long as their lending agency is satisfied.
Fact: Only if home buyers check out a copy of their 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 report can double as a record for the future, containing an exorbitant amount of data - 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 vicinity.
Myth: Appraisers are hired only to estimate building values in property sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and do provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The purpose of the appraiser is to find an opinion of value in the appraisal process and through creating the report. A home inspector analyzes the condition of the house and its main components and reports their findings.