Common myths about appraising

It is enforced by legal agencies that a real estate appraiser needs to be state-licensed to perform appraisal reports for federally-related real estate transactions in . Also by law, you are allowed to request a copy of the completed appraisal from your lender. Contact Piscitelli Appraisal Service if you have any questions about the appraisal process.

Myth: Market value must be equivocal to the assessed value of the property.

Fact: While most states support the idea that assessed value is the same as estimated market value, this generally is not the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged period.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the cost of the house will vary.

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

Myth: Market value should equal replacement cost.

Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home. Replacement cost is the dollar amount needed to reconstruct a property in-kind.

Myth: Certain methods, such as the price per square foot of the property, are the ways appraisers use to ascertain the value of a home.

Fact: There are many varied ways that an appraiser will use to make an in-depth investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable homes.

Myth: When the economy is doing well and the cost of houses are found to be rising by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.

Fact: Any value at which an appraiser arrives in regards to a particular house is always personalized, based on certain factors derived from the information of comparable properties and other specifications within the property itself. It doesn't matter if the economy is on the rise or declining.

Myth: Just examining what the home looks like on the outside gives an excellent idea of its cost.

Fact: There are a number of different factors that determine property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by inspecting the house from the exterior.

Myth: Considering that the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: Legally, the report is owned by the lender unless the lender releases their interest in the document. However, consumers have to be supplied with a copy of the document upon written request, under the Equal Credit Opportunity Act.

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

Fact: It is very important for home buyers to look at a copy of their appraisal report so that they can double-check the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an appraisal that will probably 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.