Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-related transactions. You also have the right to acquire a copy of the completed appraisal report from your lender. Contact us if you have any concerns about the appraisal procedure.

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

Fact: This is not often the case; 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 is unaware of the improvements, or when homes in the area have not been reassessed for an extended time.

Myth: The buyer or the seller may have some pull in the value of the home depending upon for whom the appraiser is working.

Fact: The price of the house does not affect the salary of the appraiser; because of this, the appraiser has no vested interest in the worth of the home. What this means is he will provide job with impartiality and objectivity regardless for whom the appraisal is created.

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

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular home, with neither being under duress to buy or sell. Replacement value is the dollar amount needed to reconstruct a home in-kind.

Myth: There are certain methods that appraisers use to find the value of a house, like the price per square foot.

Fact: There are many varied calculations that an appraiser will use to make a detailed analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.

Myth: When the economy is doing well and the worth of properties are found to be increasing by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.

Fact: Any cost at which an appraiser concludes concerning a certain house is always personalized, based on certain factors found from the information of comparable properties and other specifications within the home itself. This is true in excellent economic times as well as bad.

Myth: Just seeing what the home looks like on the outside gives an idea of its value.

Fact: Property value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply looking at the home from the exterior.

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

Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that ordered the appraisal. Consumers have to be given a version of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the report so long as it satisfies the requirements of their lending company.

Fact: Only if home buyers read a copy of their appraisal 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. Also, the appraisal makes a valuable record for future reference, containing 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.