Appraisal myths debunked

Legally, a real estate appraiser has to be state certified to perform substantiated real estate appraisals for federally-supported purchase. The law gives you the right to receive a copy of your finished appraisal report from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.

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

Fact: While most states uphold the suggestion that assessed value equates estimated market value, this generally is not the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.

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

Fact: The appraiser has no personal interest in the outcome of the appraisal and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value will equate to replacement cost.

Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. The dollar amount necessary to reconstruct a property is what shows the replacement cost.

Myth: Appraisers use a formula, such as a specific price per square foot, to figure out the value of a house.

Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.

Myth: When the economy is robust and the cost of properties are reported to be rising by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.

Fact: Value increase of a specific home is always concluded on an individualized basis, factoring in data on comparable properties and other relevant elements. This is true in excellent economic times as well as bad.

Myth: The house's exterior is determinate of the actual price of the property; there is no need to do an interior inspection.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. An external inspection obviously can't provide all of the data needed.

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

Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the appraisal. By the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with one by their lending company.

Myth: There's no point for consumers to even worry about what the report contains so long as their lender is fine with the contents therein.

Fact: It is almost imperative for consumers to go through a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an appraisal that should 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 proximity.