Appraisal myths & facts

Legally, an appraiser has to be state certified to create substantiated real estate appraisals for federally-backed purchase. Also by law, you have the ability to request a copy of the completed appraisal from your lending agency. Contact us if you have any questions about the appraisal process.

Myth: Market value must be the same as the assessed value of the property.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has been done and the assessor is unaware of the improvement or properties in the area have not been reassessed for years or more, it may vary wildly.

Myth: The appraised value of a property will change depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The appraiser has no vested interest in the outcome of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

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

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under undue influence to buy or sell. If the property were rebuilt, the dollar amount needed to do so would form the replacement cost.

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

Fact: An appraisal is a collection of information concluded from the house's size, location, proximity to certain facilities, the condition of the property and the price of recent comparable sales. You can count on James Earp Appraisal Service's staff to be ethical in assessing this information.

Myth: When the economy is doing well and the worth of homes are reported to be increasing by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.

Fact: Any cost at which an appraiser arrives in regards to a specific home is always personalized, based on certain factors derived from the information of comparable houses and other considerations within the property itself. This is true in good economic times as well as poor.

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Myth: Just seeing what the property looks like on its exterior gives an idea of its value.

Fact: There are a number of different variables that show the value of a house; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived simply by looking at the home from the outside.

Myth: Considering that the consumer is the party who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.

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

Myth: There's no point for home buyers to even concern themselves with what the appraisal contains so long as their lending agency is fine with the contents therein.

Fact: It is a very good idea for consumers to peruse a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an exorbitant amount 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 proximity.

Myth: Appraisers are hired only to estimate home values in house sales involving mortgage-lending transactions.

Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: You shouldn't need to get an appraisal if you get a home inspection.

Fact: Appraisal reports are definitely not the same as a home inspection. The appraiser forms an opinion of value in the appraisal process and resulting appraisal report. House inspectors will produce a report that will determine the condition of the home and its major components and possible damage.