Appraisal myths & facts
It is required by legal agencies that a real estate appraiser needs to be state-licensed to write appraisals for federally-related property sales in Wisconsin. Also by law, you have the ability to request a copy of the completed appraisal report from your lender. Contact us if you have any questions about the appraisal process.
Myth: Market value should be equivocal to the assessed value of the property.
Fact: While most states uphold the concept that assessed value is the same as estimated market value, this usually is not the case. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are exact examples of why there might be a differential in price.
Myth: The buyer or the seller can have impact in the cost of the property 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 services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the home will be is on par with the market value.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under pressure to buy or sell. Replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the worth of a home.
Fact: Appraisers make a detailed analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: In a robust economy - when the costs of houses in a given area are reported to be rising by a particular percentage - the values of individual houses in the vicinity can be expected to rise by that same percentage.
Fact: Cost increase of a specific house has to be determined on a case-by-case basis, factoring in data on comparable houses and other relevant elements. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Racine County or Sturtevant, WI?Contact A & B Tax Service
Myth: Just seeing what the property looks like on the outside gives an idea of its value.
Fact: There are a multitude of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by looking at the house from the exterior.
Myth: Because the consumer is the one who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. Consumers must be supplied with a copy of the document through request because of the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even worry about what the appraisal report contains so long as their lending institution is satisfied.
Fact: It is very important for home buyers to check over a copy of their appraisal so that they can double-check the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an report 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a house during a sales transaction involving a lending agency.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The job of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the house and its major components and reports their findings.