Appraisal myths debunked

Legally, an appraiser must be state certified to perform 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 concerns about the appraisal process.

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

Fact: It is probable that Hawaii, like most states, supports the idea that the assessed value is no different from the market value; however, this is not always true. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an extended time.

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

Fact: The value of the home does not affect the salary of the appraiser; because of this, the appraiser has no vested interest in the worth of the home. This means that he will provide task with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: The replacement cost of the home should be is on par with the market value.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific home, with neither being under undue influence to buy or sell. The dollar amount needed to reconstruct a property is what forms the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to come to the cost of a home.

Fact: An appraisal is an assertion of information concluded from the house's size, location, proximity to undesirable facilities, the condition of the home and the price of recent comparable sales. You can count on REID E. CHOATE & ASSOCIATES, LLC's staff to be honest in assessing this data.

Myth: In a strong economy - when the worth of properties in a given region are reported to be appreciating by a certain percentage - the worth of individual properties in the vicinity can be expected to appreciate by that same percentage.

Fact: All appreciation of value is on a one-on-one basis, concluded by data on relevant elements and the data of comparable homes. It doesn't matter if the economy is doing well or declining.

Have other questions about appraisers, appraising or real estate in Hawaii County or Pahoa, HI?

Contact our professional staff

Myth: The house's exterior is determinate of the actual price of the house; it is unnecessary to do an interior appraisal.

Fact: There are a multitude of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these things can be found simply by viewing the home from the outside.

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

Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be provided with one by their lender.

Myth: Home buyers need not worry about what is in their report so long as it meets the necessities of their lending company.

Fact: It is a very good idea for home buyers to read a copy of their report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an report that could 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 assess home values in home sales involving mortgage-lending transactions.

Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: An appraisal report does not fulfill the same purpose as an inspection report. The reason behind an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the report. House inspectors will produce a report that will determine the condition of the house and its major components and possible damage.