Common myths about appraising

Legally, a real estate appraiser is required to be state certified to produce legitimate appraisal reports for federally-supported purchase. Also by law, you are allowed to receive a copy of the completed appraisal from your lender. Contact James Earp Appraisal Service if you have any concerns about the appraisal procedure.

Myth: The value that is assessed by the appraiser should be equivalent to the market value.

Fact: It is probable that North Carolina, like most states, validates the suggestion that the assessed value equals 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 houses in the area have not been reassessed for an prolonged period.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the cost of the home will vary.

Fact: There is no vested interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.

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

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a house without being under influence from any outside group to purchase or sell. Replacement value is the dollar amount needed to rebuild a house in-kind.

Myth: There are certain ways that real estate appraisers use to show the opinion of value of a home, such as the price per square foot.

Fact: An appraisal is an assertion of data based on the house's size, location, proximity to undesirable facilities, the condition of the house and the value of recent comparable sales. You can count on James Earp Appraisal Service's staff to be honest in assessing this data.

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

Fact: Value appreciation of a specific property has to be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. It doesn't matter if the economy is on the rise or declining.

Have other questions about appraisers, appraising or real estate in Wake County or Raleigh, NC?

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Myth: You can commonly see what a house is worth simply by looking at the outside.

Fact: House value is determined by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information required.

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

Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with one by their lending agency.

Myth: Home buyers need not worry about what is in their appraisal document so long as it satisfies the needs of their lending institution.

Fact: Only if home buyers check out a copy of their appraisal 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. Also, the report makes an invaluable record for future reference, containing helpful and often-revealing information - including, but not limited to, 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: Appraisals are ordered only to estimate home values in house sales involving mortgage-lending transactions.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a variety 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: You don't have to get an appraisal if you get a home inspection.

Fact: A home inspection report has a completely different purpose than an appraisal report. The function of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the report. The job of a home inspector is to determine the condition of the home and its major components, then write a report on their findings.