Appraisal myths & facts

Legally, an appraiser has to be state certified to create substantiated appraisal reports for federally-backed transactions. The law gives you the right to receive a copy of your finished report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.

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

Fact: This usually isn't true; most states do support the idea 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 properties in the vicinity have not been reassessed for an prolonged period.

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

Fact: The opinion of value of the house does not affect the payment of the appraiser; because of this, the appraiser has no vested interest in the value of the home. What this means is he will complete his job with impartiality and independence regardless for whom the appraisal is created.

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

Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a property without being under influence from any outside party to purchase or sell. If the home were reconstructed, the dollar amount needed to do so would be the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the worth of a house.

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

Myth: In a powerful economy - when the sales prices of properties in a given region are found to be increasing by a particular percentage - the costs of individual houses in the vicinity can be expected to appreciate by that same percentage.

Fact: Cost appreciation of a specific property must be concluded on an individualized basis, factoring in data on comparable homes and other relevant specifications within the house itself. This is true in strong economic times as well as poor.

Myth: The property's outside is determinate of the actual price of the property; it is unnecessary to do an interior appraisal.

Fact: There are a number of different factors that show the value of a house; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information necessary.

Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your house, you own the produced appraisal report.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that purchased the appraisal. Consumers must be supplied with a version of the document through request as per the Equal Credit Opportunity Act.

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

Fact: Only if consumers check out a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an 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.