Common myths about appraising

Legally, a real estate appraiser must be state certified to write substantiated real estate appraisals for federally-supported sales. The law gives you the right to get a copy of your completed appraisal from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value will always be equal to market value.

Fact: While most states support the suggestion that assessed value is the same as estimated market value, this often is not the case. At times when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.

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

Fact: The appraiser has no personal interest in the outcome of the appraisal and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Any time market value is established, it should equate to the replacement cost of the house.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to rebuild a house in-kind.

Myth: There are certain methods that appraisers use to show the value of a property, such as the price per square foot.

Fact: There are many numerous methods that an appraiser will use to make an in-depth investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable houses.

Myth: In a robust economy - when the costs of homes in a given region are reported to be increasing by a certain percentage - the values of individual houses in the area can be expected to appreciate by that same percentage.

Fact: Any cost at which an appraiser arrives in regards to a certain property is always individualized, based on certain factors derived 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 house's exterior is determinate of the actual value of the house; there is no need to do an interior appraisal.

Fact: Home value is determined by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply viewing the property from the exterior.

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

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, home buyers have to be supplied with a copy of the report upon written request, due to the Equal Credit Opportunity Act.

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

Fact: A home buyer should definitely read through their appraisal report; there might be some questions or some worries with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, containing helpful and often-revealing information - 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 proximity.