Common myths about appraising

By law, an appraiser must be state-licensed to offer appraisals for federally-backed purchases. You are also entitled by law to request a copy of the completed appraisal from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Market value has to be equivocal to the assessed value of the property.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an prolonged time.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the cost of the property will vary.

Fact: The cost of the property does not affect the salary of the appraiser; as a result, the appraiser has no pressured interest in the opinion of value of the property. Obviously, he will conduct job with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: The replacement value of the home is always is on par with the market value.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell. The replacement cost is the dollar amount needed to reconstruct a house in-kind.

Myth: There are specific ways that real estate appraisers use to show the cost of a house, such as the price per square foot.

Fact: Appraisers make a comprehensive analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.

Myth: As houses increase their worth by a certain percentage - in a strong economic state - the houses around the appreciating properties are expected to appreciate by the same amount.

Fact: All appreciation of worth is on a one-on-one basis, found by data on relevant considerations and the data of comparable properties. It makes no difference if the economy is powerful or on the decline.

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

Fact: Property worth is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information needed.

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

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be provided with one by their lender.

Myth: It doesn't matter to consumers what's in the report so long as it satisfies the requirements of their lending company.

Fact: Only if consumers examine a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an appraisal that will probably be useful to the consumer 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 area.