Tuesday, February 19, 2019 / by Jody Lee
Keep reading to see appraisal myths far too many sellers believe.
Myth #1…. The appraiser can tell you what a buyer should pay.
The appraiser will give a professional opinion on the value of the home based on comparing the home to similar homes that have sold in the area. They do take into consideration the total SqFt, number of bedrooms, bathrooms, Garage, and some updating. If the appraiser is good at what he or she does, then the price will usually be close to the market value of the home.
Myth #2…. A home inspection and an appraisal are the same.
A home inspection and appraisal are very different. A home inspection is intended to identify any safety issues, defects and general condition of the home.
In contrast, an appraisal is the home's valuation. Depending on the buyers financing, the Appraiser may look for requirements for FHA, VA, and lender requirements. Common problems these loan programs do not allow include the following:
· Peeling paint on the exterior of the home.
· Blatant safety hazards like railings missing from a deck.
· Missing handrails going down a set of stairs.
· No running water.
· Non-functioning heating system.
· Missing Hot water tank seismic straps.
Myth #3…. The more money you invest in the home, the more it will appraise for.
Many sellers are upset to discover that they do not get equal value for every improvement they have made to the home. Some homeowners think the more improvements the more their home will be worth. This is not always the case.
Myth #4…. The appraiser is there to serve the needs of the buyer.
The buyer is paying for an appraiser to come in and determine the value of the home. It seems logical that since the buyer is paying for the appraisal, then the appraiser must be working for the buyer. But the truth is, the appraiser is there to serve the needs of the lender.
Myth #5…. The assessed value, the market value, and the appraised value are the same.
Assessed value is what the local tax assessor believes your property is worth. Market Value is the most competitive price a buyer is willing to possibly pay. The appraised value is the value an unbiased professional has determined the home is worth.