Appraisal myths debunked

Legally, an appraiser must be state certified to perform substantiated real estate appraisals for federally-related sales. The law entitles you to receive a copy of your finished appraisal report from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Market value should be equivocal to the assessed value of the property.

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 is not aware of and a lack of reassessment on nearby properties are perfect examples of why this occurs.

Myth: The buyer or the seller can have an influence in the value of the house depending upon for whom the appraiser is working.

Fact: The price of the house does not affect the payment of the appraiser; because of this, the appraiser has no pressured interest in the value of the property. What this means is he will render task with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Market value will approximate replacement cost.

Fact: Market value is based on what a willing buyer would likely pay a willing seller for a specific home, with neither being under undue influence to buy or sell. If the home were rebuilt, the dollar amount required to do so would be the replacement cost.

Myth: There are certain ways that appraisers use to determine the opinion of value of a house, such as the price per square foot.

Fact: There are many varied formulae that an appraiser will use to make a comprehensive analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable houses.

Myth: In a strong economy - when the prices of homes in a given county are reported to be increasing by a certain percentage - the prices of individual properties in the vicinity can be expected to appreciate by that same percentage.

Fact: Any price at which an appraiser concludes concerning a certain home is always personalized, based on certain factors found from the data of comparable homes and other specifications within the home itself. It makes no difference if the economy is strong or bad.

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

Fact: Property worth is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. Obviously, none of these things can be found just by viewing the property from the exterior.

Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your house, you own the ordered appraisal report.

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Because of the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with one by their lending agency.

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

Fact: It is almost imperative for home buyers to check over a copy of their appraisal report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored in an appraisal that will probably 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.