Appraisal myths debunked

It is mandated by the government that an appraiser needs to be state-licensed to produce appraisals for federally-supported real estate sales in Illinois. You have the ability to request a copy of the completed report from your lending agency. Contact Advanced Appraising, Ltd. if you have any concerns 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: It is probable that Illinois, like most states, supports the suggestion that the assessed value is no different from the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are prime examples of why this occurs.

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

Fact: The appraiser has no personal interest in the result of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: The replacement cost of the property is always is on par with the market value.

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a house without being under influence from any outside group to buy or sell. Replacement cost is the dollar amount required to rebuild a home in-kind.

Myth: There are specific methods that real estate appraisers use to show the opinion of value of a house, such as the price per square foot.

Fact: There are many different formulae 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 undesirable facilities and the value of recently sold comparable houses.

Myth: As houses appreciate by a certain percentage - in a robust economic state - the houses around the appreciating properties are figured to increase by the same amount.

Fact: All appreciation of worth is on a case-by-case basis, determined by information on relevant conditions and the data of comparable houses. It doesn't matter if the economy is doing well or declining.

Myth: The home's outside is determinate of the actual price of the property; it is unnecessary to do an interior inspection.

Fact: To determine an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. As you can see, none of these variables can be found simply by inspecting the property from the outside.

Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their house, they own their appraisal.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be provided with a copy of the report upon written request, through the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their appraisal document so long as it exceeds the needs of their lending company.

Fact: It is almost imperative for home buyers to look at a copy of their appraisal report so that they can verify the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, containing useful and often-revealing information - including 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.