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Herzog Appraisal Myths and Realities about Real Estate Appraisals and Appraisers

Myth: The value that is assessed by the appraiser will be the same as the market value.
Reality: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby properties are excellent examples of why this occurs.

Myth: The buyer or the seller may have impact in the cost of the home depending upon for whom the appraiser is working.
Reality: The appraised value of the property does not affect the salary of the appraiser; as a result, the appraiser has no vested interest in the price of the house. What this means is he will conduct business with impartiality and independence regardless of for whom the appraisal is created.

Myth: Market value will equal replacement cost.
Reality: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a home without being under influence from any outside group to purchase or sell. The dollar amount required to reconstruct a house is what forms the replacement cost.

It is enforced by law that a real estate appraiser be state-licensed to perform appraisals for federally-related transactions in Michigan. You are also entitled by law to receive a copy of the finished appraisal from your lending agency. Contact Herzog Appraisal if you have any concerns about the appraisal procedure.

 

 

 

 

 

Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the value of a home.
Reality: There are many differing ways that an appraiser will use to make a full analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable homes.

Myth: When the economy is doing well and the sales prices of properties are found to be increasing by a certain percentage, the other properties in the vicinity can be expected to appreciate based on that same percentage.
Reality: An increase in value of a specific house is always determined on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the house itself. This is true in excellent economic times as well as bad.

Myth: You can often see what a house is worth simply by looking at the exterior.
Reality: There are a multitude of different factors that show the value of a house; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by looking at the home from the exterior.

Myth: Since you're the one providing the money for the appraisal report when applying for your loan to purchase or refinance your home, you own the provided appraisal.
Reality: Unless a lending agency releases its interest in the document, it is legally owned by the lending company that purchased the appraisal. However, home buyers have to be given a copy of the report upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the report so long as it satisfies the needs of their lender.
Reality: A consumer should definitely read through their appraisal; there will probably be some questions or some concerns about the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in a report 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 area.

Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lender.
Reality: Ordering an appraisal can fulfill a variety of needs 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 don't need to get an appraisal if you get a home inspection.
Reality: Appraisal reports are definitely not the same as a home inspection. An appraiser forms an opinion of value in the appraisal process and resulting document. A home inspector determines the condition of the home and its main components and reports their findings.

Contact us if you have any other questions about appraisers, appraising or real estate in Iosco or Hale, Michigan.