Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to create legitimate appraisal reports for federally-related sales. You are also entitled by law to request a copy of the completed appraisal report from your lending agency. Contact us if you have any questions about the appraisal procedure.

Myth: Market value will be similar to the assessed value of the property.

Fact: While most states support the suggestion that assessed value is equal to estimated market value, this generally is not the case. Often when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.

Myth: The buyer or the seller can have an influence in the cost of the property depending upon for whom the appraiser is working.

Fact: The appraised value of the property does not affect the pay of the appraiser; as a result, the appraiser has no pressured interest in the opinion of value of the property. What this means is he will conduct job with impartiality and independence regardless for whom the appraisal is conducted.

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

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain home, with neither being under duress to buy or sell. If the house were reconstructed, the dollar amount needed to do so would form the replacement cost.

Myth: There are certain methods that appraisers use to find the cost of a property, such as the price per square foot.

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

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

Fact: All increase of worth is on a case-by-case basis, determined by data on relevant elements and the data of comparable properties. This is true in excellent economic times as well as bad.

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Myth: You can often see what a property is worth simply by looking at the exterior.

Fact: To find an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this data from simply inspecting the house from the exterior.

Myth: Because the consumer is the person who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Home buyers have to be given a copy of the report through request because of the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their appraisal document so long as it exceeds the necessities of their lending group.

Fact: It is almost imperative for home buyers to read a copy of their report so that they can double-check the accuracy of the document, in case they need to question its accuracy. 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 incredible 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 area.

Myth: The only reason someone would order an appraisal is if a home needs its price assessed in a lender-based sales transaction.

Fact: Based upon their qualifications and designations, appraisers can and do provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: A property inspection serves the same purpose as an appraisal.

Fact: A home inspection serves a completely different purpose than an appraisal report. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. A home inspector assesses the condition of the property and its main components and reports their findings.