Common myths about appraising

By law, an appraiser must be state-licensed to produce appraisals for federally-backed transactions. Also by law, you are entitled to demand a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value should equate to 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. Often when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for a good length of time, it may vary wildly.

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

Fact: The cost of the house does not affect the pay of the appraiser; due to this, the appraiser has no pressured interest in the cost of the house. Obviously, he will provide task with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: The replacement cost of the property will be is on par with the market value.

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

Myth: Specific formulae, like the price per square foot of the property, are the ways appraisers use to ascertain the cost of a house.

Fact: Appraisers make a detailed analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable houses.

Myth: When the economy is robust and the cost of houses are found to be rising by a certain percentage, the other homes in the area can be expected to rise based on that same percentage.

Fact: Any cost at which an appraiser arrives concerning a certain house is always personalized, based on certain factors concluded from the data of comparable properties and other specifications within the home itself. It makes no difference if the economy is powerful or poor.

Myth: Just looking at what the house looks like on its exterior gives an idea of its value.

Fact: To determine an accurate worth beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. An outside-only inspection definitely can't provide all of the data required.

Myth: Because the consumer is the party who puts up the capital to pay for the appraisal 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 report, it is legally owned by the lending agency that ordered the appraisal. Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be given it by their lending agency.

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

Fact: Only if consumers read a copy of their appraisal 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. An appraisal report can serve as a record for the future, containing an exorbitant amount of data - including, but 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.