Appraisal myths & facts

Legally, an appraiser must be state certified to perform substantiated real estate appraisals for federally-backed transactions. You also have the right to demand a copy of the completed appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.

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

Fact: This usually isn't true; most states do support the idea 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 area have not been reassessed for an prolonged time.

Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the value of the house will vary.

Fact: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is conducted.

Myth: Market value should equal replacement cost.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under pressure to buy or sell. Replacement value is the dollar amount needed to rebuild a home in-kind.

Myth: Certain methods, like the price per square foot of the property, are what appraisers use to arrive at the cost of a house.

Fact: There are many varied ways that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable houses.

Myth: As properties appreciate by a specific percentage - in a strong economic state - the houses within the same neighborhood are figured to appreciate by the same amount.

Fact: Any value at which an appraiser concludes concerning a certain property is always personalized, based on certain factors derived from the data of comparable houses and other considerations within the house itself. This is true in good economic times as well as bad.

Myth: Just looking at what the property looks like on the outside gives a good idea of its value.

Fact: Home worth is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply viewing the house from the exterior.

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

Fact: Legally, the report is owned by the lending company unless the lender relinquishes their interest in the document. Consumers have to be supplied with a copy of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it meets the necessities of their lender.

Fact: A consumer should definitely read through their document; there might be some questions or some worries about the accuracy of the report 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 an excellent record for future reference, comprised of useful and often-revealing information - 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 proximity.