Appraisal myths & facts

By law, an appraiser needs to be state-licensed to offer appraisals for federally-related sales. The law allows you to acquire a copy of your completed report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser will be equivalent to the market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an extended period of time.

Myth: The value of a home will be different depending upon if the appraisal is produced for the buyer or the seller.

Fact: There is no real interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is created.

Myth: Any time market value is found, it should equate to the replacement cost of the property.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular home, with neither being under undue influence to buy or sell. The replacement cost is the dollar amount required to reconstruct a home in-kind.

Myth: There are certain ways that appraisers use to show the cost of a home, such as the price per square foot.

Fact: There are many differing processes that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable properties.

Myth: As houses appreciate by a certain percentage - in a strong economy - the properties nearby are figured to appreciate by the same amount.

Fact: All increase of price is on an individual basis, determined by data on relevant conditions and the data of comparable houses. This is true in fair economic times as well as bad.

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

Fact: To find an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. An exterior inspection certainly can't provide all of the data required.

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

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be given one by their lending company.

Myth: Consumers need not be concerned with what is in their appraisal so long as it exceeds the necessities of their lending agency.

Fact: A consumer should definitely inspect their appraisal; there will probably be some questions or some worries about the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing a great deal of information - including, but certainly 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 vicinity.