Appraisal myths debunked

Legally, a real estate appraiser has to be state certified to create legitimate appraisal reports for federally-related transactions. Also by law, you are allowed to receive a copy of the completed report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value should always equate to market value.

Fact: While most states support the suggestion that assessed value is equal to estimated market value, this often is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are perfect examples of why there might be a differential in price.

Myth: Depending on if the appraisal is done for the buyer or the seller, the cost of the home will vary.

Fact: The appraised value of the house does not affect the pay of the appraiser; as such, the appraiser has no preconceived interest in the opinion of value of the house. Obviously, he will complete his business with impartiality and objectivity regardless for whom the appraisal is created.

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

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular house, with neither being under duress to buy or sell. Replacement value is the dollar amount required to reconstruct a home in-kind.

Myth: There are specific ways that real estate appraisers use to show the value of a house, like the price per square foot.

Fact: There are many varied processes that an appraiser will use to make a full investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable homes.

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

Fact: Any worth at which an appraiser arrives in regards to a specific house is always personalized, based on certain factors pulled from the information of comparable houses and other considerations within the house itself. This is true in good economic times as well as poor.

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

Fact: Home worth is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply inspecting the property from the outside.

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

Fact: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the report. Home buyers must be provided with a copy of the document upon written request due to the Equal Credit Opportunity Act.

Myth: There's no need for consumers to even worry about what the appraisal report contains so long as their lender is satisfied.

Fact: Only if consumers read a copy of their appraisal report 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. There is an incredible amount of information contained in an appraisal that can 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 region.