Common myths about appraising

Legally, an appraiser has to be state certified to create substantiated real estate appraisals for federally-related sales. You also have the right to request a copy of the completed report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

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

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby homes are perfect examples of why the price can vary.

Myth: The buyer or the seller often will have an influence in the cost of the home depending upon for whom the appraiser is working.

Fact: The price of the property does not affect the salary of the appraiser; due to this, the appraiser has no preconceived interest in the cost of the property. This means that he will complete his business with impartiality and independence regardless for whom the appraisal is provided.

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

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain property, with neither being under duress to buy or sell. The dollar amount needed to rebuild a property is what shows the replacement cost.

Myth: Specific formulae, like the price per square foot, are the methods appraisers use to come to the cost of a house.

Fact: There are many varied calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable homes.

Myth: As houses appreciate by a specific percentage - in a robust economic state - the properties in proximity are expected to increase by the same amount.

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

Myth: The house's exterior is determinate of the actual value of the home; there is no need to do an interior inspection.

Fact: There are a multitude of different factors that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information necessary.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their property, they legally own their appraisal.

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

Myth: Consumers need not worry about what is in their document so long as it satisfies the needs of their lending institution.

Fact: It is very important for consumers to peruse a copy of their appraisal so that they can verify the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an report that will probably be useful to the consumer 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.