Appraisal myths & facts
Legally, an appraiser must be state certified to produce substantiated appraisal reports for federally-related transactions. The law allows you to get a copy of your finished appraisal from your lending agency after it has been provided. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Fact: It might be that Wisconsin, like most states, supports the common myth that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. Usually when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: The buyer or the seller sometimes may have leverage in the value of the home depending upon for whom the appraiser is working.
Fact: The cost of the home does not affect the pay of the appraiser; due to this, the appraiser has no vested interest in the value of the property. What this means is he will render business with impartiality and objectivity regardless for whom the appraisal is provided.
Myth: Any time market value is established, it should equate to the replacement cost of the home.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under pressure to buy or sell. The dollar amount necessary to rebuild a home is what shows the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to figure out the value of a property.
Fact: There are many different formulae that an appraiser will use to make a full investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable homes.
Myth: When the economy is robust and the value of properties are found to be rising by a certain percentage, the other properties in the vicinity can be expected to appreciate based on that same percentage.
Fact: All increase of price is on a case-by-case basis, concluded by information on relevant conditions and the data of comparable homes. It makes no difference if the economy is robust or on the decline.
Have other questions about appraisers, appraising or real estate in Racine County or Sturtevant, WI?Contact A & B Tax Service
Myth: Just looking at what the house looks like on the outside gives an idea of its value.
Fact: There are a number of different variables that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply viewing the home from the exterior.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their house, they legally own their appraisal.
Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be given one by their lender.
Myth: Consumers need not be concerned with what is in their appraisal document so long as it satisfies the necessities of their lending institution.
Fact: It is a very good idea for consumers to check over a copy of their appraisal so that they can double-check the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an appraisal that can be useful to the consumer in the future, such as 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: Appraisals are ordered only to estimate building values in property sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and do perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is the same as a home inspection.
Fact: Appraisal reports are completely different than a home inspection report. The purpose of the appraiser is to find an opinion of value in the appraisal process and through producing the report. House inspectors will compose a report that will express the condition of the property and its major components and possible damage.