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Appraisal myths debunked

By law, an appraiser must be state-licensed to perform appraisals for federally-backed sales. The law entitles you to receive a copy of your completed report from your lending agency after it has been produced. Contact A-Appraisals if you have any concerns about the appraisal procedure.

Myth: The value that is assessed by the appraiser is required to be the same as the market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Generally when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the area have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller can have some pull in the cost of the home depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the outcome of the appraisal and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value should be the same as replacement cost.

Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. If the property were rebuilt, the dollar amount required to do so would make up the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the cost of a property.

Fact: An appraisal report is an assertion of information based on the home's size, location, proximity to undesirable facilities, the condition of the property and the cost of recent comparable sales. You can depend on A-Appraisals's staff to be forthright in assessing this information.

Myth: When the economy is robust and the value of houses are found to be increasing by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.

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

Have other questions about appraisers, appraising or real estate in Lake County or Lake Zurich, IL?

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Myth: Just seeing what the property looks like on its exterior gives an excellent idea of its value.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. An exterior inspection obviously can't provide all of the data necessary.

Myth: Since the consumer is the person who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the document. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with it by their lender.

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

Fact: A home buyer should definitely look through their document; there may be some questions or some concerns with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, filled with helpful 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 area.

Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the price of a house during a sales transaction involving a lending company.

Fact: Based upon their qualifications and designations, appraisers can and will provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: An appraisal is no different than a home inspection.

Fact: Appraisal reports are definitely not the same as a home inspection. The function of an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector determines the condition of the home and its main components and reports their findings.