Common myths about appraising

Legally, a real estate appraiser is required to be state certified to produce substantiated real estate appraisals for federally-supported transactions. Also by law, you have the ability to request a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal procedure.

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

Fact: While most states uphold the suggestion that assessed value is equal to estimated market value, this generally is not the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby houses are exact examples of why there might be a differential in price.

Myth: Depending on whether the appraisal is produced for the buyer or the seller, the cost of the home will vary.

Fact: There is no vested interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is written.

Myth: The replacement cost of the house should be on par with the market value.

Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. Replacement cost is the dollar amount required to rebuild a property in-kind.

Myth: Appraisers use a calculation, like a certain price per square foot, to arrive at the cost of a property.

Fact: There are many numerous methods that an appraiser will use to make a detailed investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable houses.

Myth: In a robust economy - when the values of homes in a given county are found to be appreciating by a particular percentage - the values of individual houses in the area can be expected to rise by that same percentage.

Fact: Cost appreciation of a specific house is always concluded on a case-by-case basis, factoring in data on comparable houses and other relevant specifications within the house itself. It doesn't matter if the economy is on the rise or declining.

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

Fact: To find an accurate price beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just inspecting the home from the outside.

Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their home, they own their appraisal.

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, consumers must be provided with a copy of the report upon written request, because of the Equal Credit Opportunity Act.

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

Fact: Only if home buyers read a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an appraisal that can 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.