Appraisal myths debunked

Legally, a real estate appraiser is required to be state certified to write substantiated appraisal reports for federally-backed purchase. You have the ability to acquire a copy of the finished report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value generally will be equal to market value.

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 has not seen the improvements, or when properties in the area have not been reassessed for an prolonged period.

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

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

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

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

Myth: Appraisers use a calculation, such as a specific price per square foot, to conclude the cost of a house.

Fact: There are many different processes that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable houses.

Myth: When the economy is robust and the cost of homes are found to be increasing by a certain percentage, the other properties in the proximity can be expected to increase based on that same percentage.

Fact: All increase of worth is on a case-by-case basis, found by data on relevant elements and the data of comparable homes. It doesn't matter if the economy is on the rise or declining.

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

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 market trends. An exterior inspection certainly can't provide all of the data necessary.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance real estate, you own the produced appraisal report.

Fact: Legally, the report is owned by the lender unless the lender releases their interest in the document. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be given one by their lending agency.

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

Fact: Only if home buyers read a copy of their appraisal can they double-check 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 an incredible amount of information 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.