Common myths about appraising
By law, an appraiser needs to be state-licensed to produce appraisals for federally-backed sales. You also have the right to receive a copy of the finished report from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value should be similar to to market value.
Fact: It could be that Maryland, like most states, validates the common myth that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby houses are excellent examples of why the price can vary.
Myth: The value of a home will differ depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.
Myth: Any time market value is established, it should be similar to the replacement cost of the house.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under undue influence to buy or sell. The dollar amount needed to rebuild a house is what constitutes the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to figure out the value of a home.
Fact: An appraisal report is a collection of information concluded from the home's size, location, proximity to some facilities, the condition of the property and the cost of recent comparable sales. You can rely on Magee Appraisal Service's staff to be forthright in assessing this information.
Myth: In a robust economy - when the sales prices of houses in a given region are reported to be increasing by a certain percentage - the values of individual homes in the area can be expected to appreciate by that same percentage.
Fact: Value increase of a certain home is always determined on an individualized basis, factoring in data on comparable houses and other relevant specifications within the house itself. This is true in strong economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Frederick County or Fredrick, MD?Contact our professional staff
Myth: You can generally find what a home is worth simply by looking at the outside.
Fact: Property value is concluded by a number of variables, including area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by looking at the property from the outside.
Myth: Since the consumer is the party who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: The document is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be provided with one by their lender.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the requirements of their lending company.
Fact: It is very important for home buyers to read a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent 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 proximity.
Myth: Appraisers are hired only to estimate building values in house sales involving mortgage-lending transactions.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal. An appraiser forms an opinion of value in the appraisal process and resulting report. House inspectors will create a report that will determine the condition of the home and its major components and possible damage.