Appraisal Facts or Fictions?

This subject has been discussed many times, but we think it deserves addressing again in light of today’s market. Buyers and Sellers both are taking more interest in the nuts and bolts of the processes of buying and selling in the real estate market. We strongly believe that a well informed client makes for a smoother process in each stage of the process. Here we will try to clarify some questions or beliefs people may have about the Appraisal Process to see if what is fact or fiction!!.

When I’m asked what the purpose is of the appraisal request, does that mean there are different values for different purposes? The answer to this question is no. The appraiser generally asks this question to help him/her determine the scope of work necessary to perform a credible report. The scope of work could be to determine market value for a lending transaction, a listing appraisal, a division of assets, etc. What the purpose is will determine what content is needed for the report. The opinion of value will be the same for any purpose.

Is the tax value for my house the same as the appraised value? The answer is possibly! However, it’s not probable. When most taxing authorities assess their County’s properties the concept they have is that the assessed value approximates the market value. However the tax assessor does not enter the house to see improvements and conditions which can make a difference. In addition, the tax value as reported on the County GIS is as of the date of assessment last made and/or properties in the vicinty may not have been for reassessed recently.

I paid for the appraisal therefore I own it. The response to this statement is possibly. If you engaged the Appraiser for a determination of market value for your use, yes you own it (clarification: if you want the appraisal for a lending transaction you will not be able to order your own appraisal). However, if your Lender engaged the Appraiser, no the Lender owns it. If the Lender ordered the appraisal they legally own it unless they release their interest. You are entitled to a copy of the report, however you are not able to use the report for your benefit unless the Lender releases it to you or a new Lender (assuming they will accept the report).

There are many other questions, opinions and mindsets that can addressed, however these three are most frequently mentioned. If you have any issue, let us know and we’ll try to help.

 

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