Appraisal myths debunked

Legally, a real estate appraiser must be state certified to perform legitimate appraisal reports for federally-backed purchase. Also by law, you are allowed to receive a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.

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

Fact: While most states uphold the idea that assessed value equates estimated market value, this generally is not the case. Generally when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: The appraised value of a home will differ depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: The appraised value of the home does not affect the pay of the appraiser; because of this, the appraiser has no personal interest in the opinion of value of the home. What this means is he will complete his task with impartiality and independence regardless for whom the appraisal is provided.

Myth: The replacement value of the property will be is on par with the market value.

Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. If the property were reconstructed, the dollar amount required to do so would form the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to come to the worth of a home.

Fact: Appraisers complete a detailed analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: In a strong economy - when the values of homes in a given region are found to be increasing by a particular percentage - the prices of individual homes in the proximity can be expected to rise by that same percentage.

Fact: Worth increase of a specific property is always concluded on an individualized basis, factoring in data on comparable homes and other relevant elements. It doesn't matter if the economy is on the rise or declining.

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

Fact: Property value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data required.

Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their house, they legally own their appraisal.

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. By the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be given one by their lending agency.

Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the needs of their lending agency.

Fact: It is almost imperative for home buyers to peruse a copy of their appraisal report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal report 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.