Appraisal myths & facts

By law, an appraiser must be state-licensed to offer appraisals for federally-supported purchases. Also by law, you have the ability to receive a copy of the completed appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Market value should be similar to the assessed value of the property.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an prolonged time.

Myth: The appraised value of a home will vary depending upon if the appraisal is produced for the buyer or the seller.

Fact: The opinion of value of the property does not affect the pay of the appraiser; as a result, the appraiser has no preconceived interest in the cost of the home. This means that he will conduct business with impartiality and independence regardless for whom the appraisal is provided.

Myth: Any time market value is found, it should be similar 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 particular home, with neither being under pressure to buy or sell. The dollar amount needed to reconstruct a property is what shows the replacement cost.

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

Fact: There are many different processes 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 cost of recently sold comparable houses.

Myth: In a strong economy - when the costs of properties in a given neighborhood are reported to be rising by a certain percentage - the worth of individual homes in the proximity can be expected to appreciate by that same percentage.

Fact: All appreciation of worth is on an individual basis, found by information on relevant elements and the data of comparable properties. It makes no difference if the economy is robust or on the decline.

Myth: The house's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.

Fact: Home worth is determined by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by viewing the house from the outside.

Myth: Since you're the one paying for the appraisal when applying for your loan to purchase or refinance your house, you own the produced appraisal report.

Fact: Legally, the appraisal report is owned by the lending agency unless the lender releases their interest in the document. However, consumers must be given a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lending agency.

Fact: Only if consumers check out a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an exorbitant amount of data - including, but certainly not limited to 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.