Insurance irony of NY appraisals
Homeowners are often miffed with NY appraisers. This is because when they get their properties appraise for the purpose of home insurance, the insurance cost comes out to be much higher. This is despite the fact that in most cases, the market value of the house is lower than what the owner actually paid while buying it.
For those who are not aware, appraisals for insurance purposes are aimed at calculating the replacement cost of the property being appraised. This is to say that during NY appraisals for insurance, an appraiser takes all materials into consideration and then works out the price of rebuilding the entire structure from scratch. During the calculations, no architectural changes are taken into account and it is assumed that same quality materials will be used. The outcome of these facts is that the replacement cost of the property comes out to be higher than the current price of the property. No wonder, homeowners don’t like the idea of appraisals done in NY for insurance purposes.
But while you may be angry with this, we’d like to present our side of the story. Yes when we conduct appraisals in NY, we may reach a figure which may not be very pleasing to the client. However, if you take into the account the many procedural nuances, you will realize that the NY appraisal results are not arbitrarily reached upon. Basically, when we conduct appraisals in NY for older properties, we cannot exactly estimate the costs, because many of the materials initially used in building are no longer available. Moreover, while property prices have not increased, or rather have decreased, inflation has affected every other aspect. Thus, even if we consider the same materials as used previously, cost increases. NY appraisals are not fishy; blame it upon the conditions.