Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-supported transactions. The law allows you to get a copy of your finished report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value generally will be equal to market value.

Fact: While most states uphold the concept that assessed value equates estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an extended period of time.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the appraised value of the home will vary.

Fact: The opinion of value of the property does not affect the salary of the appraiser; because of this, the appraiser has no vested interest in the worth of the home. Obviously, he will provide services with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: Market value should be the same as replacement cost.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under undue influence to buy or sell. The dollar amount needed to rebuild a house is what shows the replacement cost.

Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the cost of a home.

Fact: Appraisers complete a full analysis of all factors pertaining to the worth of a home, including its location, condition, size, proximity to facilities and recent worth of comparable houses.

Myth: When the economy is strong and the value of properties are reported to be rising by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.

Fact: All increase of worth is on a case-by-case basis, found by data on relevant elements and the data of comparable homes. This is true in good economic times as well as poor.

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

Fact: To find an accurate value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. An external inspection obviously can't provide all of the data required.

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

Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be given it by their lending agency.

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

Fact: A consumer should definitely inspect their report; there may be some questions or some concerns with the accuracy of the inspection that should 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 appraisal that could be useful to the home buyer 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.