Common myths about appraising

Legally, an appraiser is required to be state certified to write legitimate appraisal reports for federally-supported transactions. Also by law, you are entitled to demand a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.

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

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Generally when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the have not been reassessed for a good length of time, it may vary wildly.

Myth: Depending on whether the appraisal is produced for the buyer or the seller, the opinion of value of the house will vary.

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

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

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a property without being under duress from any external group to purchase or sell. The dollar amount needed to rebuild a house is what constitutes the replacement cost.

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

Fact: Appraisers make a detailed analysis of all factors in consideration to the price of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: When the economy is robust and the value of properties are reported to be appreciating by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.

Fact: All increase of value is on a case-by-case basis, determined by data on relevant considerations and the data of comparable properties. It makes no difference if the economy is robust or poor.

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

Fact: Home value is concluded by a multitude of variables, including area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information necessary.

Myth: Considering that the consumer is the one who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.

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

Myth: Consumers need not worry about what is in their appraisal report so long as it meets the necessities of their lending company.

Fact: It is a very good idea for home buyers to go through a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing a great deal 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 area.