Appraisal myths & facts
It is required by legal agencies that an appraiser is required to be state-licensed to perform appraisals for federally-related property purchases in Hawaii. The law entitles you to get a copy of your finished appraisal report from your lending agency after it has been provided. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be equivalent to 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 happened and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an extended period.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the opinion of value of the property will vary.
Fact: The cost of the house does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the worth of the home. This means that he will render job with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Market value should be the same as replacement cost.
Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. The dollar amount demanded to rebuild a house is what shows the replacement cost.
Myth: There are certain methods that appraisers use to find the opinion of value of a house, like the price per square foot.
Fact: There are many different calculations that an appraiser will use to make a comprehensive analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable houses.
Myth: In a strong economy - when the prices of homes in a given county are found to be rising by a certain percentage - the worth of individual properties in the vicinity can be expected to rise by that same percentage.
Fact: Any worth at which an appraiser concludes in regards to a certain house is always individualized, based on certain factors found from the data of comparable houses and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Hawaii County or Pahoa, HI?Contact our professional staff
Myth: Just seeing what the house looks like on the outside gives a good idea of its worth.
Fact: There are a multitude of different factors that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information needed.
Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance real estate, you own the produced appraisal.
Fact: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the document. Consumers have to be supplied with a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lending agency.
Fact: A consumer should definitely look through their document; there could be some questions or some concerns with the accuracy of the appraisal that must be addressed. 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, as it contains an exorbitant amount of information - including, but certainly 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.
Myth: The only reason someone would order an appraisal is if a property needs its price estimated in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a variety of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection report. An appraiser forms an opinion of value in the appraisal process and resulting document. The purpose of a home inspector is to assess the condition of the home and its main components, then provide a report on these inspection.