Common myths about appraising

Legally, an appraiser has to be state certified to create legitimate appraisal reports for federally-backed sales. Also by law, you have the right to request a copy of the finished appraisal report from your lending agency. Contact us if you have any concerns about the appraisal process.

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

Fact: It might be that , like most states, supports the idea that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. Usually when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for quite some time, it may vary wildly.

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

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

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

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 house. Replacement value is the dollar amount needed to rebuild a house in-kind.

Myth: Certain methods, such as the price per square foot, are what appraisers use to come to the worth of a house.

Fact: There are many different formulae that an appraiser will use to make a full investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable homes.

Myth: As homes increase their worth by a certain percentage - in a robust economy - the homes around the appreciating properties are expected to appreciate by the same amount.

Fact: All appreciation of worth is on an individual basis, determined by data on relevant elements and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.

Myth: Just examining what the property looks like on its exterior gives a good idea of its value.

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply looking at the property from the outside.

Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their property, they own their appraisal report.

Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the report. Consumers have to be provided with a copy of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even care about what the report contains so long as their lending company is fine with the contents therein.

Fact: It is a very good idea for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an report that can be useful to the consumer 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 proximity.