Appraisal myths & facts

Legally, an appraiser must be state certified to create legitimate real estate appraisals for federally-supported transactions. Also by law, you are allowed to request a copy of the finished appraisal from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Market value will always be the same as the assessed value of the property.

Fact: While most states back the concept that assessed value is the same as estimated market value, this usually is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged time.

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

Fact: The opinion of value of the house does not affect the pay of the appraiser; due to this, the appraiser has no pressured interest in the opinion of value of the house. What this means is he will render services with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Market value should be the same as replacement cost.

Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a home without being under influence from any external party to purchase or sell. Replacement cost is the dollar amount required to rebuild a house in-kind.

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

Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.

Myth: In a powerful economy - when the values of properties in a given neighborhood are found to be rising by a particular percentage - the worth of individual properties in the area can be expected to appreciate by that same percentage.

Fact: All increase of value is on a one-on-one basis, found by data on relevant considerations and the data of comparable properties. It doesn't matter if the economy is doing well or declining.

Myth: You can often see what a property is worth simply by looking at the outside.

Fact: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by examining the property from the outside.

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

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. Consumers must be provided with a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their appraisal document so long as it exceeds the necessities of their lending company.

Fact: Only if home buyers look at a copy of their report can they verify 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, since it contains an incredible 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.