Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-supported transactions. Also by law, you have the right to request a copy of the finished appraisal from your lender. Contact us if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser will be exactly the same as the market value.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.

Myth: The value of a house will differ depending upon if the appraisal is produced for the buyer or the seller.

Fact: The appraised value of the property does not affect the payment of the appraiser; because of this, the appraiser has no vested interest in the worth of the house. This means that he will conduct task with impartiality and independence regardless for whom the appraisal is provided.

Myth: Market value should approximate replacement cost.

Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. The dollar amount necessary to rebuild a house is what shows the replacement cost.

Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the cost of a property.

Fact: Appraisers make a detailed analysis of all factors pertaining to the price of a home, including its location, condition, size, proximity to facilities and recent worth of comparable properties.

Myth: When the economy is on the rise and the value of homes are found to be appreciating by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.

Fact: Any value at which an appraiser concludes in regards to a certain home is always individualized, based on certain factors concluded from the data of comparable houses and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.

Myth: The home's exterior is determinate of the actual value of the property; it is unnecessary to do an interior appraisal.

Fact: To determine an accurate value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by inspecting the property from the outside.

Myth: Since you're the one providing the money for the appraisal report when applying for the loan to purchase or refinance real estate, you own the ordered appraisal.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be given it by their lender.

Myth: Home buyers need not be concerned with what is in their appraisal document so long as it satisfies the necessities of their lending institution.

Fact: A home buyer should definitely inspect their appraisal; there will probably be some questions or some worries with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, as it contains a great deal of information - including, but certainly 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 proximity.