Common myths about appraising

Legally, an appraiser has to be state certified to produce legitimate real estate appraisals for federally-backed purchase. Also by law, you are allowed to demand a copy of the finished appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal process.

Myth: The value that is assessed by the appraiser will be the same as the market value.

Fact: While most states support the concept that assessed value is the same as estimated market value, this generally is not the case. Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: The buyer or the seller may have some pull in the value of the house depending upon for whom the appraiser is working.

Fact: The appraised value of the house does not affect the pay of the appraiser; as a result, the appraiser has no pressured interest in the opinion of value of the house. Obviously, he will provide task with impartiality and objectivity regardless for whom the appraisal is created.

Myth: Market value will approximate replacement cost.

Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a property without being under influence from any outside party to purchase or sell. The dollar amount demanded to reconstruct a home is what forms the replacement cost.

Myth: Certain methods, such as the price per square foot of the property, are what appraisers use to determine the price of a house.

Fact: Appraisers complete a full analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent costs of comparable homes.

Myth: When the economy is doing well and the value of houses are reported to be appreciating by a certain percentage, the other houses in the vicinity can be expected to rise based on that same percentage.

Fact: All appreciation of worth is on a case-by-case basis, determined by information on relevant considerations and the data of comparable properties. This is true in fair economic times as well as poor.

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

Fact: To find an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these things can be found simply by inspecting the home from the outside.

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

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. However, home buyers have to be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

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

Fact: It is a very good idea for consumers to read a copy of their report 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. An appraisal report can serve as a record for the future, since it contains an exorbitant amount of data - including, but certainly 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 vicinity.