Appraisal myths debunked
It is enforced by law that a real estate appraiser is required to be state-licensed to create appraisals for federally-related property transactions in Wisconsin. Also by law, you are allowed to receive a copy of the completed report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser must be equivalent to the market value.
Fact: While most states back the suggestion that assessed value is the same as estimated market value, this commonly is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged period.
Myth: The appraised value of a home will vary depending upon if the appraisal is produced for the buyer or the seller.
Fact: The appraised value of the house does not affect the payment of the appraiser; due to this, the appraiser has no personal interest in the value of the home. What this means is he will provide services with impartiality and independence regardless for whom the appraisal is produced.
Myth: Market value will be the same as replacement cost.
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 external party to buy or sell. The replacement cost is the dollar amount necessary to rebuild a house in-kind.
Myth: There are specific ways that appraisers use to show the cost of a home, like the price per square foot.
Fact: There are many numerous methods that an appraiser will use to make a full analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable homes.
Myth: In a strong economy - when the costs of houses in a given area are found to be increasing by a certain percentage - the values of individual properties in the vicinity can be expected to rise by that same percentage.
Fact: Any cost at which an appraiser arrives in regards to a specific property is always individualized, based on certain factors found from the data of comparable properties and other specifications within the property itself. It makes no difference whether the economy is good or terrible.
Have other questions about appraisers, appraising or real estate in Racine County or Sturtevant, WI?Contact us
Myth: The home's outside is determinate of the actual price of the property; there is no need to do an interior appraisal.
Fact: There are a multitude of different variables that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by examining the house from the outside.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their house, they legally own their appraisal.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, home buyers have to be provided with a copy of the appraisal report upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even concern themselves with what the appraisal report contains so long as their lender is fine with the contents therein.
Fact: A consumer should definitely read through their appraisal report; there might be some questions or some worries with the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a valuable record for future reference, comprised of useful and often-revealing 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 area.
Myth: Appraisers are hired only to estimate building values in house sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and often do perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you order a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal. The function of an appraisal is to arrive at an opinion of fair market value during the appraisal process and the production of the report. The task of a home inspector is to find the condition of the home and its main components, then produce a report on their findings.