Appraisal myths debunked

Legally, an appraiser needs to be state certified to perform substantiated appraisal reports for federally-supported sales. You are also entitled by law to receive a copy of the finished appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.

Myth: The value that is ascertained by the appraiser should be equivalent to the market value.

Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this commonly is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are excellent examples of why the price can vary.

Myth: The buyer or the seller sometimes may have impact in the cost of the home depending upon for whom the appraiser is working.

Fact: There is no vested interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is created.

Myth: Any time market value is found, it should equate to the replacement cost of the home.

Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. The dollar amount required to rebuild a home is what constitutes the replacement cost.

Myth: Certain formulae, such as the price per square foot, are what appraisers use to ascertain the cost of a property.

Fact: An appraisal is a collection of data concluded from the property's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can rely on Appraisal Professionals's staff to be ethical in assessing this information.

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

Fact: All increase of worth is on a case-by-case basis, determined by information on relevant conditions and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.

Myth: Just looking at what the house looks like on the outside gives a good idea of its worth.

Fact: To determine an accurate worth beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data necessary.

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

Fact: Legally, the document is owned by the lending company unless the lender releases their interest in the appraisal. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be provided with one by their lending company.

Myth: It doesn't matter to consumers what's in the report so long as it meets the necessities of their lender.

Fact: It is almost imperative for home buyers to read a copy of their appraisal so that they can verify the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, as it contains an exorbitant amount of data - including, but 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.