Appraisal myths & facts
Legally, a real estate appraiser is required to be state certified to produce substantiated appraisal reports for federally-backed sales. Also by law, you have the right to request a copy of the finished appraisal from your lender. Contact EAC Real Estate Ventures & Appraisals if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be the same as the market value.
Fact: It is possible that Massachusetts, like most states, supports the idea that the assessed value is the same as the market value; however, this is not always true. Usually when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller will have some pull in the cost of the home depending upon for whom the appraiser is working.
Fact: The appraised value of the property does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the opinion of value of the home. This means that he will complete his task with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Any time market value is established, it should be the same as the replacement cost of the property.
Fact: The way market value is found 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 required to rebuild a house is what constitutes the replacement cost.
Myth: There are certain ways that appraisers use to find the opinion of value of a property, like the price per square foot.
Fact: There are many differing calculations that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to specific facilities and the cost of recently sold comparable houses.
Myth: In a strong economy - when the sales prices of homes in a given county are found to be increasing by a certain percentage - the costs of individual properties in the proximity can be expected to rise by that same percentage.
Fact: Value appreciation of a specific property must be concluded on a case-by-case basis, factoring in data on comparable houses and other relevant elements. It makes no difference if the economy is good or poor.
Have other questions about appraisers, appraising or real estate in Massachusetts?Contact our professional staff
Myth: Just looking at what the house looks like on its exterior gives a good idea of its worth.
Fact: There are a number of different variables that show the value of a house; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data necessary.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their house, they own their appraisal.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Home buyers have to be given a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal so long as it meets the necessities of their lending agency.
Fact: Only if consumers look over a copy of their report 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. Also, the appraisal makes a valuable record for future reference, containing helpful and often-revealing 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: The only reason someone would hire an appraiser is if a property needs its worth estimated in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no need to get an appraisal if you order a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal report. The purpose of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the report. A home inspector determines the condition of the home and its main components and reports these findings.