Common myths about appraising

By law, an appraiser needs to be state-licensed to produce appraisals for federally-related purchases. The law allows you to acquire a copy of your completed report from your lender after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Market value will be the same as the assessed value of the property.

Fact: It is probable that , like most states, supports the idea that the assessed value is the same as the market value; however, this is not often the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby properties are perfect examples of why there might be a differential in price.

Myth: The appraised value of a property will change depending upon if the appraisal is ordered for the buyer or the seller.

Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.

Myth: The replacement value of the home should be is on par with the market value.

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under duress to buy or sell. If the home were reconstructed, the dollar amount necessary to do so would be the replacement cost.

Myth: There are certain ways that real estate appraisers use to find the cost of a property, such as the price per square foot.

Fact: There are many varied calculations that an appraiser will use to make a comprehensive investigation 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 properties.

Myth: When the economy is on the rise and the cost of homes are reported to be increasing by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.

Fact: Worth increase of a specific home has to be determined on an individualized basis, factoring in data on comparable homes and other relevant elements. This is true in fair economic times as well as poor.

Myth: You can generally tell what a house is worth simply by looking at the exterior.

Fact: To determine an accurate value beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these things can be derived simply by inspecting the home from the outside.

Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their house, they own their appraisal report.

Fact: Legally, the report is owned by the lender unless the lender releases their interest in the report. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be provided with it by their lender.

Myth: There's no point for home buyers to even worry about what the appraisal report contains so long as their lending company is satisfied.

Fact: Only if home buyers check out a copy of their appraisal report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an appraisal report that will probably be useful to the home buyer in the future, such as 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 region.