Appraisal myths & facts

Legally, a real estate appraiser must be state certified to perform 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 if you have any questions about the appraisal procedure.

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

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 has not seen the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.

Myth: Depending on if the appraisal is written for the buyer or the seller, the opinion of value of the property will vary.

Fact: The value of the home does not affect the payment of the appraiser; due to this, the appraiser has no vested interest in the worth of the property. What this means is he will provide task with impartiality and independence regardless for whom the appraisal is created.

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

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. If the property were rebuilt, the dollar amount necessary to do so would form the replacement cost.

Myth: Certain formulae, like the price per square foot of the property, are the ways appraisers use to arrive at the value of a home.

Fact: There are many varied ways that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable houses.

Myth: In a strong economy - when the prices of properties in a given neighborhood are found to be rising by a certain percentage - the prices of individual properties in the area can be expected to appreciate by that same percentage.

Fact: Any price at which an appraiser concludes in regards to a particular property is always personalized, based on certain factors pulled from the information of comparable properties and other specifications within the house itself. It doesn't matter if the economy is doing well or declining.

Myth: You can usually find what a home is worth simply by looking at the exterior.

Fact: There are a multitude of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply looking at the home from the outside.

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

Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the appraisal. Consumers must be provided with a version of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their report so long as it exceeds the requirements of their lending institution.

Fact: A home buyer should definitely inspect their appraisal; there may be some questions or some worries about the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal report 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.