Appraisal myths & facts

It is mandated by legal agencies that a real estate appraiser must be state-licensed to write appraisals for federally-related real estate sales in Hawaii. Also by law, you are entitled to request a copy of the finished report from your lending agency. Contact TSH Real Estate and Appraisal Services, LLC if you have any questions about the appraisal procedure.

Myth: Market value needs to be equivocal to the assessed value of the property.

Fact: It is probable that Hawaii, like most states, supports the idea that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.

Myth: The buyer or the seller sometimes may have some pull in the cost of the property depending upon for whom the appraiser is working.

Fact: The appraised value of the house does not affect the salary of the appraiser; due to this, the appraiser has no preconceived interest in the opinion of value of the house. Obviously, he will provide services with impartiality and independence regardless for whom the appraisal is produced.

Myth: Any time market value is established, it should be the same as the replacement cost of the property.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell. The dollar amount needed to rebuild a house is what constitutes the replacement cost.

Myth: There are specific ways that real estate appraisers use to find the opinion of value of a home, like the price per square foot.

Fact: There are many different calculations that an appraiser will use to make a comprehensive analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable houses.

Myth: As houses increase their worth by a certain percentage - in a robust economic state - the houses nearby are expected to increase by the same amount.

Fact: All appreciation of price is on an individual basis, determined by data on relevant considerations and the data of comparable properties. This is true in strong economic times as well as bad.

Myth: Just seeing what the home looks like on its exterior gives a good idea of its worth.

Fact: House value is determined by a number of factors, including area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just looking at the home from the exterior.

Myth: Considering that the consumer is the person who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Consumers have to be supplied with a copy of the document through request as per the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal report so long as it satisfies the requirements of their lending company.

Fact: Only if home buyers check out a copy of their appraisal report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, since it contains an exorbitant amount of data - 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.