Appraisal myths & facts

Legally, an appraiser must be state certified to perform legitimate real estate appraisals for federally-supported sales. You are also entitled by law to receive a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Assessed value should always equate to market value.

Fact: It is probable that , like most states, validates the idea that the assessed value equates to the market value; however, this is not often the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended period.

Myth: The opinion of value of a house will be different depending upon whether the appraisal is provided for the buyer or the seller.

Fact: The value of the home does not affect the payment of the appraiser; because of this, the appraiser has no vested interest in the cost of the home. What this means is he will provide task with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Any time market value is established, it should equal the replacement cost of the home.

Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a property without being under pressure from any external group to purchase or sell. Replacement cost is the dollar amount needed to reconstruct a property in-kind.

Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the worth of a home.

Fact: Appraisers make a comprehensive analysis of all factors in consideration to the worth of a property, including its location, condition, size, proximity to facilities and recent values of comparable properties.

Myth: In a powerful economy - when the costs of houses in a given county are reported to be appreciating by a particular percentage - the values of individual homes in the proximity can be expected to rise by that same percentage.

Fact: Any cost at which an appraiser arrives concerning a certain home is always individualized, based on certain factors found from the data of comparable houses and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.

Myth: The house's outside 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 location, condition, improvements, amenities, and current market trends. An outside-only inspection certainly can't provide all of the data needed.

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

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

Myth: There's no need for consumers to even care about what the appraisal report contains so long as their lending institution is fine with the contents therein.

Fact: A home buyer should definitely read through their document; there may be some questions or some concerns about the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, containing helpful and often-revealing data - including 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 vicinity.