Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to write substantiated appraisal reports for federally-related sales. You have the ability to demand a copy of the finished report from your lender. Contact us if you have any questions about the appraisal process.

Myth: Assessed value should always equate to market value.

Fact: While most states back the idea that assessed value is equal to estimated market value, this often is not the case. Usually when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the Spring have not been reassessed for years or more, it may vary wildly.

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

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

Fact: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. The dollar amount needed to rebuild a house is what shows the replacement cost.

Myth: Certain methods, such as the price per square foot, are the methods appraisers use to come to the worth of a house.

Fact: Appraisers complete a detailed analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.

Myth: In a powerful economy - when the sales prices of houses in a given county are reported to be rising by a certain percentage - the values of individual properties in the vicinity can be expected to increase by that same percentage.

Fact: Worth increase of a specific property must be determined on an individualized basis, factoring in information on comparable houses and other relevant elements. It makes no difference whether the economy is strong or poor.

Myth: The house's exterior is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.

Fact: House value is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found simply by viewing the house from the outside.

Myth: Because the consumer is the party who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: Legally, the report is owned by the lending company unless the lender relinquishes their interest in the report. Consumers must be provided with a version of the document upon written request as per the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even worry about what the appraisal contains so long as their lending institution is satisfied.

Fact: It is almost imperative for consumers to look at a copy of their appraisal report so that they can double-check the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, containing useful and often-revealing information - including 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.