Common myths about appraising

By law, an appraiser needs to be state-licensed to offer appraisals for federally-supported transactions. Also by law, you have the ability to request a copy of the completed appraisal from your lending agency. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value generally will equate to market value.

Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this commonly is not the case. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby houses are exact examples of why the price can vary.

Myth: The buyer or the seller sometimes may have impact in the cost of the home depending upon for whom the appraiser is working.

Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is written.

Myth: Any time market value is found, it should be similar to the replacement cost of the property.

Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular property. If the property were reconstructed, the dollar amount required to do so would form the replacement cost.

Myth: Specific methods, like the price per square foot, are the methods appraisers use to come to the worth of a home.

Fact: Appraisers make an exhaustive analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.

Myth: When the economy is strong and the value of homes are found to be increasing by a certain percentage, the other homes in the area can be expected to rise based on that same percentage.

Fact: Any value at which an appraiser arrives in regards to a specific home is always personalized, based on certain factors concluded from the data of comparable homes and other considerations within the house itself. It makes no difference whether the economy is good or terrible.

Myth: Just looking at what the property looks like on its exterior gives an excellent idea of its cost.

Fact: There are a multitude of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information needed.

Myth: Considering that the consumer is the party who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal. Home buyers have to be provided with a copy of the appraisal report through request because of 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 lender.

Fact: Only if home buyers look at a copy of their 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. Also, the appraisal report makes a near perfect record for future reference, comprised of 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 area.