Common myths about appraising
By law, an appraiser needs to be state-licensed to produce appraisals for federally-supported sales. Also by law, you are allowed to request a copy of the finished appraisal from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value should always be similar to to market value.
Fact: It is probable that Wisconsin, like most states, supports the common myth that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby houses are prime examples of why the price can vary.
Myth: The buyer or the seller often will have impact in the value of the house depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: Any time market value is established, it should be similar to the replacement cost of the home.
Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a certain house, with neither being under pressure to buy or sell. The dollar amount required to rebuild a home is what shows the replacement cost.
Myth: Certain formulae, such as the price per square foot, are the methods appraisers use to arrive at the price of a home.
Fact: Appraisers make a full analysis of all factors pertaining to the worth of a property, including its location, condition, size, proximity to facilities and recent worth of comparable homes.
Myth: When the economy is on the rise and the cost of homes are reported to be rising by a certain percentage, the other properties in the vicinity can be expected to appreciate based on that same percentage.
Fact: Any worth at which an appraiser concludes in regards to a certain property is always individualized, based on certain factors found from the information of comparable homes and other specifications within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Racine County or Sturtevant, WI?Contact our professional staff
Myth: Just seeing what the property looks like on the outside gives a good idea of its value.
Fact: Home value is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these things can be found simply by viewing the house from the exterior.
Myth: Considering that the consumer is the one who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: The document is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document. However, consumers have to be provided with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even worry about what the report contains so long as their lending agency is satisfied.
Fact: It is almost imperative for consumers to check over a copy of their appraisal so that they can double-check the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, as it contains an exorbitant amount 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 proximity.
Myth: Appraisals are ordered only to estimate building values in property sales involving mortgage-lending transactions.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a multitude 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: An appraisal report does not serve the same purpose as an inspection report. The job of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. The purpose of a home inspector is to approximate the condition of the house and its main components, then create a report on these findings.