Common myths about appraising

It is required by the government that a real estate appraiser must be state-licensed to create appraisal reports for federally-supported property purchases in Florida. The law entitles you to get a copy of your finished appraisal report from your lender after it has been provided. Contact Collier Residential Appraisal, Inc. if you have any questions about the appraisal process.

Myth: Market value should be similar to the assessed value of the property.

Fact: It is possible that Florida, like most states, supports the suggestion that the assessed value equates to the market value; however, this is not often the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.

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

Fact: The appraiser has no vested interest in the result of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is found, it should equal the replacement cost of the house.

Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any external group to purchase or sell. The dollar amount necessary to reconstruct a property is what forms the replacement cost.

Myth: Certain formulae, like the price per square foot of the property, are the methods appraisers use to arrive at the value of a home.

Fact: An appraisal is a collection of data concluded from the home's size, location, proximity to some facilities, the condition of the property and the price of recent comparable sales. You can count on Collier Residential Appraisal, Inc.'s appraisers to be professional in assessing this data.

Myth: When the economy is on the rise and the value of properties are reported to be appreciating by a certain percentage, the other properties in the area can be expected to increase based on that same percentage.

Fact: All increase of price is on an individual basis, found by data on relevant considerations and the data of comparable houses. This is true in excellent economic times as well as poor.

Myth: The home's outside is determinate of the actual worth of the property; there is no need to do an interior appraisal.

Fact: Home worth is concluded by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. Obviously, none of these things can be found just by examining the home from the exterior.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, they legally own their appraisal.

Fact: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the document. By the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be given one by their lending company.

Myth: Consumers need not worry about what is in their appraisal report so long as it satisfies the needs of their lending company.

Fact: Only if consumers look over a copy of their report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an appraisal that can 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 vicinity.