Common myths about appraising

It is required by the government that an appraiser is required to be state-licensed to create appraisal reports for federally-related home sales in California. The law entitles you to acquire a copy of your finished appraisal from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value should always be the same as to market value.

Fact: It might be that California, like most states, supports the suggestion that the assessed value equates to the market value; however, this is not always true. Sometimes when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the Lake Elsinore have not been reassessed for a good length of time, it may vary wildly.

Myth: The opinion of value of a property will be different depending upon if the appraisal is provided for the buyer or the seller.

Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.

Myth: Any time market value is found, it should be the same as 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 particular property, with neither being under duress to buy or sell. Replacement cost is the dollar amount needed to reconstruct a house in-kind.

Myth: Certain methods, like the price per square foot, are what appraisers use to arrive at the price of a property.

Fact: There are many numerous methods 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 specific facilities and the worth of recently sold comparable properties.

Myth: When the economy is strong and the value of homes are reported to be rising by a certain percentage, the other homes in the proximity can be expected to rise based on that same percentage.

Fact: Cost increase of a certain house must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the property itself. It makes no difference if the economy is powerful or terrible.

Myth: The home's outside is determinate of the actual price of the house; there is no need to do an interior inspection.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from simply inspecting the house from the exterior.

Myth: Because the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report. Consumers must be provided with a copy of the document through request because of the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the report so long as it satisfies the requirements of their lending company.

Fact: It is a very good idea for home buyers to check over a copy of their appraisal so that they can verify 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. An report can serve as a record for the future, since it contains a great deal of 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.