Common myths about appraising

Legally, a real estate appraiser has to be state certified to produce legitimate real estate appraisals for federally-related purchase. Also by law, you are allowed to demand a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.

Myth: Depending on whether the appraisal is provided for the buyer or the seller, the value of the house will vary.

Fact: The opinion of value of the home does not affect the payment of the appraiser; because of this, the appraiser has no pressured interest in the cost of the house. This means that he will complete his services with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: Any time market value is found, it should be similar to the replacement cost of the home.

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a particular house, with neither being under duress to buy or sell. If the home were reconstructed, the dollar amount required to do so would be the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the value of a property.

Fact: There are many differing methods that an appraiser will use to make an in-depth analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable properties.

Myth: In a strong economy - when the prices of homes in a given neighborhood are reported to be rising by a particular percentage - the costs of individual properties in the vicinity can be expected to increase by that same percentage.

Fact: Any worth at which an appraiser arrives in regards to a particular property is always individualized, based on certain factors derived from the data of comparable homes and other specifications within the home itself. It makes no difference if the economy is good or on the decline.

Have other questions about appraisers, appraising or real estate in La Crosse County or Holmen, WI?

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Myth: Just examining what the house looks like on its exterior gives an excellent idea of its cost.

Fact: House value is determined by a number of variables, including area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply viewing the home from the outside.

Myth: Since the consumer is the person who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. However, consumers have to be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it meets the necessities of their lending agency.

Fact: A home buyer should definitely read through their document; there may be some questions or some concerns with the accuracy of the report that need to be addressed. 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 home buyer 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 proximity.

Myth: Appraisers are hired only to estimate house values in home sales involving mortgage-lending transactions.

Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: You shouldn't need to get an appraisal if you order a home inspection.

Fact: Appraisal reports are definitely not the same as a home inspection. The function of an appraisal is to find an opinion of fair market value during the appraisal process and the completion of the report. House inspectors will compose a report that will show the condition of the house and its major components and possible damage.