Common myths about appraising

Legally, a real estate appraiser needs to be state certified to write substantiated real estate appraisals for federally-supported transactions. You have the ability to demand a copy of the finished appraisal report from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value should be similar to to market value.

Fact: While most states uphold the suggestion that assessed value equates estimated market value, this commonly is not the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are exact examples of why there might be a differential in price.

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

Fact: The appraiser has no vested interest in the result of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: The replacement value of the house should be is on par with the market value.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under duress to buy or sell. The dollar amount necessary to rebuild a home is what shows the replacement cost.

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

Fact: Appraisers complete a detailed analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.

Myth: As homes appreciate by a specific percentage - in a robust economic state - the homes around the appreciating properties are expected to increase by the same amount.

Fact: All appreciation of value is on a one-on-one basis, determined by information on relevant elements and the data of comparable homes. It makes no difference whether the economy is powerful or poor.

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

Fact: House value is determined by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply looking at the property from the exterior.

Myth: Since the consumer is the one who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with one by their lender.

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the requirements of their lender.

Fact: It is very important for consumers to look at a copy of their appraisal so that they can double-check the accuracy of the report, in case it's required to question its veracity. 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, filled with helpful and often-revealing information - including, but 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 proximity.