Appraisal myths & facts

It is required by the government that an appraiser needs to be state-licensed to create appraisal reports for federally-supported real estate transactions in Tennessee. The law entitles you to receive a copy of your completed appraisal from your lender after it has been provided. Contact us if you have any questions about the appraisal process.

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

Fact: While most states back the suggestion that assessed value approximates estimated market value, this often is not the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an extended time.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the opinion of value of the property will vary.

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, regardless for whom the appraisal is written.

Myth: Market value should equal replacement cost.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under pressure to buy or sell. Replacement value is the dollar amount needed to rebuild a house in-kind.

Myth: Appraisers use a formula, such as a specific price per square foot, to arrive at the cost of a property.

Fact: An appraisal is an assertion of information concluded from the property's size, location, proximity to undesirable facilities, the condition of the property and the price of recent comparable sales. You can count on Integrated Assets's staff to be honest in assessing this information.

Myth: As homes appreciate by a specific percentage - in a strong economic state - the houses within the same neighborhood are figured to increase by the same amount.

Fact: Cost appreciation of a specific home is always concluded on an individualized basis, factoring in data on comparable houses and other relevant considerations. It doesn't matter if the economy is doing well or declining.

Myth: The home's exterior is determinate of the actual price of the property; it is unnecessary to do an interior inspection.

Fact: House worth is concluded by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by examining the property from the outside.

Myth: Considering that the consumer is the one who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Home buyers must be given a copy of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: There's no need for consumers to even worry about what the appraisal contains so long as their lending company is satisfied.

Fact: A home buyer should definitely read through their report; there may be some questions or some concerns about the accuracy of the appraisal report that must be addressed. 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, filled with useful 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 area.