Appraisal myths debunked

Legally, a real estate appraiser must be state certified to produce legitimate appraisal reports for federally-backed sales. The law entitles you to acquire a copy of your finished report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

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

Fact: While most states support the suggestion that assessed value is equal to estimated market value, this commonly is not the case. Generally when interior remodeling has been done and the assessor is has not investigated the improvement or other houses in the area have not been reassessed for quite a while, it may vary wildly.

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

Fact: The appraiser has no personal interest in the outcome of the report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Any time market value is established, it should equal the replacement cost of the property.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular home, with neither being under undue influence to buy or sell. If the home were rebuilt, the dollar amount needed to do so would make up the replacement cost.

Myth: Specific methods, like the price per square foot, are the ways appraisers use to determine the value of a house.

Fact: An appraisal is an amalgamation of information based on the property's size, location, proximity to certain facilities, the condition of the property and the value of recent comparable sales. You can depend on 's staff to be professional in assessing this information.

Myth: When the economy is strong and the value of homes are found to be appreciating by a certain percentage, the other properties in the neighborhood can be expected to rise based on that same percentage.

Fact: All increase of price is on an individual basis, determined by data on relevant elements and the data of comparable houses. This is true in fair economic times as well as poor.

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

Fact: To find an accurate value beyond all doubt, an appraiser must assess the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the information necessary.

Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance your home, you own the provided appraisal report.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal report. Home buyers must be provided with a copy of the document upon written request as per the Equal Credit Opportunity Act.

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

Fact: Only if home buyers read a copy of their appraisal can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, since it contains an incredible amount of information - 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.