Common myths about appraising

By law, an appraiser is required to be state-licensed to perform appraisals for federally-backed purchases. Also by law, you have the right to request a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.

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

Fact: While most states back the idea that assessed value is equal to estimated market value, this usually is not the case. At times when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.

Myth: The opinion of value of a house will differ depending upon whether the appraisal is provided for the buyer or the seller.

Fact: The price of the home does not affect the pay of the appraiser; due to this, the appraiser has no pressured interest in the value of the home. What this means is he will render task with impartiality and independence regardless for whom the appraisal is conducted.

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

Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a property without being under pressure from any external group to purchase or sell. The dollar amount necessary to reconstruct a property is what shows the replacement cost.

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

Fact: Appraisers complete a full analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: In a powerful economy - when the worth of houses in a given neighborhood are reported to be increasing by a certain percentage - the costs of individual homes in the vicinity can be expected to rise by that same percentage.

Fact: Worth appreciation of a certain property is always concluded on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. It doesn't matter if the economy is doing well or declining.

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

Fact: There are a number of different variables that conclude property value; these factors include location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data necessary.

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

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

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

Fact: A home buyer should definitely read through their document; there will probably be some questions or some concerns about 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. Also, the appraisal report makes a near perfect record for future reference, containing helpful and often-revealing information - including 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.