The
Appraisal Facts
Assumption:
The appraised value of a property will vary,
depending upon whether the appraisal is conducted
for the buyer or the seller.
Fact: The appraiser has no vested interest
in the outcome of the appraisal and should render
services with independence, objectivity and
impartiality. The market tells the appraiser
value through paired analysis.
Assumption: Appraisers
are hired only to estimate real estate property
values in property sales involving mortgage-lending
transactions.
Fact: Depending upon their qualifications
and designations, appraisers can and do provide
a variety of services, including advice for
estate planning, dispute resolution, zoning
and tax assessment review, PMI Removal, Divorce,
and cost/benefit analysis.
Assumption: Market value
should approximate replacement cost.
Fact: Market value is based on what a
willing buyer likely would pay a willing seller
for a particular property, with neither being
under pressure to buy or sell. Replacement cost
is the dollar amount required to reconstruct
a property in-kind.
Assumption: Assessed
value should equate to market value.
Fact: While most states support the concept
that assessed value approximate estimated market
value, this often is not the case. Examples
include when interior remodeling has occurred
and the assessor is unaware of the improvements,
or when properties in the vicinity have not
been reassessed for an extended period.
Assumption: Appraisers
use a formula, such as a specific price per
square foot, to figure out the value of a home.
Fact: Appraisers make a detailed analysis
of all factors pertaining to the value of a
home including its location, condition, size,
proximity to facilities and recent sale prices
of comparable properties in the subject market
area.
Assumption: Because consumers
pay for appraisals when applying for loans to
purchase or refinance real estate, they own
their appraisal.
Fact: The appraisal is, legally owned
by the lender - unless the lender "releases
its interest" in the document. However,
consumers may obtain a copy of the appraisal
report from their lender who had ordered the
report under the Equal Credit Opportunity Act.
Assumption: An Appraisal
is the same as a home inspection.
Fact: An Appraisal does not serve the
same purpose as an inspection. The Appraiser
forms an opinion of value in the Appraisal process
and resulting report. A home inspector determines
the structural integrity of the dwelling &
the condition of its major components and reports
these findings.
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