An appraisal is the same as a home inspection.
An appraisal does not serve the same purpose as an inspection. The Appraiser forms an opinion of value in the Appraisal process and ending report. A home inspector determines the condition of the home and its major components and reports on those findings.
You can generally tell what a property is worth by just looking at the outside.
Property value is determined by a number of factors including location, condition, quality, improvements, amenities, and current market trends.
The appraised value of a property will vary depending on whether the appraisal was conducted for the buyer or the seller.
An Appraiser has no vested interest in the outcome of an appraisal and should render services with independence, objectivity, and impartiality regardless of whom the client may be.
Appraisers use a formula, such as a specific price per square foot, to figure-out the value of a home.
Appraisers make a detailed analysis of all factors pertaining to the value of a home including, but not limited to, its location, condition, size, proximity to facilities, and recent sales of comparable properties.
Market value should approximate replacement cost.
Market value is based on what a willing buyer likely would pay a willing seller for a specific property. Replacement cost is the dollar amount required to reconstruct a property in-kind.
Assessed value should equate to market value.
While most states support the concept that assessed value approximate estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements or when properties in the vicinity have not been reassessed for an extended period of time.
Consumers do not need to be concerned about what is in the appraisal report as long as it satisfies the needs on their lending institution.
Only if consumers read a copy of their appraisal report can they double-check its accuracy and question the result. Also, it makes a valuable record for future reference. It contains useful, often revealing, information such as the legal and physical description of the property, square footage measurements, comparable properties in the neighborhood, current real estate activity, market trends…etc.
Appraisers are hired only to estimate real estate values in property sales involving mortgage-lending transactions.
Depending upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review, and cost/benefit analysis.
Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they own their appraisal.
The appraisal is actually legally owned by the lender, unless the lender “releases its interest” in the document. However, consumers must be given a copy of the appraisal report, upon written request, under the Equal Credit Opportunity Act.