Common myths about appraising
It is enforced by the government that an appraiser needs to be state-licensed to offer appraisal reports for federally-related home purchases in Hawaii. You also have the right to request a copy of the finished appraisal report from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Market value has to be equivocal to the assessed value of the property.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an prolonged period of time.
Myth: The value of a home will change depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is found, it should equate to the replacement cost of the house.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific house, with neither being under undue influence to buy or sell. The dollar amount needed to rebuild a house is what constitutes the replacement cost.
Myth: Appraisers use a formula, such as a certain price per square foot, to come to the value of a home.
Fact: There are many varied formulae that an appraiser will use to make a comprehensive investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable homes.
Myth: When the economy is robust and the worth of houses are found to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to increase based on that same percentage.
Fact: Any price at which an appraiser arrives concerning a specific home is always personalized, based on certain factors concluded from the data of comparable properties and other specifications within the home itself. It makes no difference whether the economy is excellent or poor.
Have other questions about appraisers, appraising or real estate in Hawaii County or Pahoa, HI?Contact REID E. CHOATE & ASSOCIATES, LLC
Myth: The home's outside is determinate of the actual worth of the house; it is unnecessary to do an interior appraisal.
Fact: Home value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just examining the property from the exterior.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance real estate, they legally own their appraisal.
Fact: Legally, the document is owned by the lender unless the lender releases their interest in the document. Home buyers have to be provided with a copy of the document through request because of the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their report so long as it satisfies the requirements of their lending institution.
Fact: It is very important for home buyers to go through a copy of their appraisal report so that they can double-check the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, containing helpful and often-revealing data - 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 vicinity.
Myth: The only reason someone would order an appraisal is if a house needs its value estimated in a lender sales transaction.
Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude 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 have had a home inspection.
Fact: A home inspection report serves a completely different purpose than an appraisal. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. A home inspector assesses the condition of the building and its main components and reports their findings.