Common myths about appraising

By law, an appraiser is required to be state-licensed to perform appraisals for federally-related sales. The law entitles you to acquire a copy of your finished appraisal report from your lender after it has been produced. Contact Appraisal Professionals if you have any questions 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 concept that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.

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

Fact: The appraiser has no personal interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

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

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain house, with neither being under duress to buy or sell. The dollar amount required to reconstruct a property is what forms the replacement cost.

Myth: There are certain ways that appraisers use to find the value of a home, like the price per square foot.

Fact: There are many differing calculations that an appraiser will use to make a comprehensive investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable properties.

Myth: When the economy is strong and the value of homes are found to be increasing by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.

Fact: All appreciation of value is on a one-on-one basis, found by information on relevant conditions and the data of comparable houses. It makes no difference whether the economy is strong or bad.

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

Fact: To find an accurate value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. Obviously, none of these variables can be derived just by viewing the home from the exterior.

Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their home, they own their appraisal report.

Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Home buyers must be provided with a copy of the report upon written request because of the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the report so long as it satisfies the necessities of their lending company.

Fact: It is almost imperative for consumers to read a copy of their appraisal so that they can double-check the accuracy of the report, 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 a wealth of information stored in an appraisal report that should 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 area.