Appraisal myths debunked

It is enforced by law that an appraiser needs to be state-licensed to perform appraisals for federally-supported home transactions in Tennessee. The law allows you to receive a copy of your completed appraisal report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value should always be equal to market value.

Fact: While most states back the idea that assessed value approximates estimated market value, this commonly is not the case. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an extended period.

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

Fact: The appraiser has no personal interest in the result of the appraisal and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value should equate to replacement cost.

Fact: Without any suggestion from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home. If the property were rebuilt, the dollar amount necessary to do so would be the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the value of a house.

Fact: An appraisal report is an amalgamation of data based on the home's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can count on Integrated Assets's staff to be honest in assessing this data.

Myth: In a strong economy - when the prices of properties in a given area are found to be rising by a certain percentage - the worth of individual properties in the proximity can be expected to increase by that same percentage.

Fact: Value increase of a certain property must be determined on an individualized basis, factoring in information on comparable houses and other relevant specifications within the house itself. It makes no difference whether the economy is strong or bad.

Myth: You can generally see what a home is worth simply by looking at the exterior.

Fact: Property value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data required.

Myth: Because the consumer is the person who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the appraisal. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be provided with one by their lending company.

Myth: Home buyers need not be concerned with what is in their report so long as it meets the needs of their lending group.

Fact: A consumer should definitely inspect their report; there could be some questions or some concerns with the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an report 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 region.