Common myths about appraising

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-supported transactions. The law gives you the right to get a copy of your completed report from your lending agency after it has been provided. Contact Karen A. Zirpoli - KAZ Appraisals, LLC if you have any questions about the appraisal procedure.

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

Fact: It could be that Virginia, like most states, supports the idea that the assessed value is the same as the market value; however, this is not often the case. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the neighborhood have not been reassessed for quite a while, it may vary wildly.

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

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

Myth: Market value will equal replacement cost.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside party to buy or sell. The dollar amount demanded to rebuild a home is what shows the replacement cost.

Myth: Appraisers use a calculation, such as a specific price per square foot, to come to the worth of a home.

Fact: There are many differing formulae that an appraiser will use to make a comprehensive analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable homes.

Myth: When the economy is robust and the cost of homes are reported to be rising by a certain percentage, the other homes in the proximity can be expected to rise based on that same percentage.

Fact: All appreciation of worth is on a case-by-case basis, found by information on relevant elements and the data of comparable houses. It makes no difference whether the economy is strong or on the decline.

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

Fact: There are a number of different factors that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply looking at the home from the outside.

Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their property, they own their appraisal report.

Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. Home buyers have to be supplied with a copy of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even worry about what the appraisal report contains so long as their lending institution is satisfied.

Fact: Only if consumers look over a copy of their appraisal 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. There is a great deal of data contained in an appraisal that should be useful to the consumer in the future, such as 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.