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Appraisals by Michael Dishes Myths and Realities About Real Estate Appraisals and Appraisers

It is enforced by the government that a real estate appraiser acquire and maintain a license to write appraisal reports for federally-related transactions in Georgia. Also by law, you have the right to receive a copy of the finished report from your lender. Contact Appraisals By Michael if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser is required to be exactly the same as the market value.
Reality: It is probable that Georgia, like most states, validates the idea that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby properties are prime examples of why this occurs.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the value of the home will vary.
Reality: There is no personal interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is conducted.

Myth: The replacement cost of the home will be on par with the market value.
Reality: The way market value is found is based on what a buyer would likely pay a willing seller for a house without being under pressure from any outside party to buy or sell. The dollar amount needed to reconstruct a house is what constitutes the replacement cost.

Myth: Certain methods, like the price per square foot, are what appraisers use to arrive at the value of a house.
Reality: There are many varied methods that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the values of recently sold comparable homes.

Myth: As properties appreciate by a certain percentage - in a robust economy - the properties around the appreciating properties are expected to appreciate by the same amount.
Reality: An increase in value of a certain house is always concluded on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the house itself. It makes no difference if the economy is excellent or terrible.

Myth: You can generally find what a property 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. An exterior inspection certainly can't provide all of the data needed.

Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their home, they legally own their appraisal.
Reality: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the document. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be provided with it by their lending company.

Myth: There's no need for home buyers to even worry about what the report contains so long as their lender is satisfied.
Reality: Only when consumers examine a copy of their appraisal report can they ensure its accuracy and know if they should ask questions. 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 consumer 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: The only reason someone would hire an appraiser is if a property needs its value assessed in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and do perform a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: A property inspection serves the same purpose as an appraisal.
Reality: A home inspection report serves a completely different purpose than an appraisal. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. House inspectors will compose a report that will determine the condition of the house and its major components and possible damage.

 

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