Appraisal myths & facts
It is enforced by law that a real estate appraiser is required to be state-licensed to write appraisals for federally-supported home transactions in Hawaii. You have the ability to demand a copy of the completed appraisal report from your lending agency. Contact Appraisal Express HI, LLC if you have any questions about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
Fact: It is probable that Hawaii, like most states, supports the suggestion that the assessed value is no different from the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are perfect examples of why there might be a differential in price.
Myth: The opinion of value of a house will change depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: The appraiser has no personal interest in the outcome of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement value of the home is always is on par with the market value.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under undue influence to buy or sell. If the home were rebuilt, the dollar amount required to do so would form the replacement cost.
Myth: There are specific methods that real estate appraisers use to show the value of a home, such as the price per square foot.
Fact: There are many differing formulae that an appraiser will use to make a full analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the cost of recently sold comparable properties.
Myth: When the economy is robust and the cost of houses are reported to be increasing by a certain percentage, the other homes in the neighborhood can be expected to rise based on that same percentage.
Fact: All appreciation of value is on an individual basis, determined by data on relevant conditions and the data of comparable homes. It makes no difference if the economy is strong or terrible.
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Myth: Just looking at what the property looks like on its exterior gives a good idea of its value.
Fact: There are a number of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information required.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their house, they own their appraisal.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending company that purchased the appraisal. Home buyers have to be supplied with a version of the appraisal report through request due to the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even concern themselves with what the appraisal report contains so long as their lender is satisfied.
Fact: It is almost imperative for consumers to read a copy of their appraisal report so that they can double-check the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing a great deal of information - including, but certainly 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: The only reason someone would hire an appraiser is if a property needs its value estimated in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The function of an appraisal report is to form an opinion of fair market value during the appraisal process and the production of the appraisal. House inspectors will write a report that will explain the condition of the home and its major components and possible damage.