Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-supported sales. The law allows you to acquire a copy of your finished appraisal from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser should be the same as the market value.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby houses are prime examples of why the price can vary.

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

Fact: The value of the home does not affect the pay of the appraiser; because of this, the appraiser has no pressured interest in the cost of the home. Obviously, he will complete his job with impartiality and independence regardless for whom the appraisal is created.

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

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. The replacement cost is the dollar amount necessary to rebuild a house in-kind.

Myth: Certain formulae, such as the price per square foot of the property, are what appraisers use to come to the value of a property.

Fact: There are many different methods that an appraiser will use to make a comprehensive analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable properties.

Myth: In a powerful economy - when the costs of homes in a given region are reported to be appreciating by a particular percentage - the costs of individual houses in the area can be expected to rise by that same percentage.

Fact: All increase of price is on a case-by-case basis, found by information on relevant considerations and the data of comparable homes. It doesn't matter if the economy is doing well or declining.

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

Fact: House worth is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information necessary.

Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their home, they legally own their appraisal report.

Fact: Legally, the document is owned by the lending company unless the lender releases their interest in the report. Consumers have to be given a copy of the appraisal report upon written request as per the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the requirements of their lending agency.

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