Appraisal myths debunked

Legally, a real estate appraiser needs to be state certified to write legitimate real estate appraisals for federally-related purchase. The law entitles you to receive a copy of your completed report from your lender after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Market value needs to be similar to the assessed value of the property.

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. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period.

Myth: The value of a property will be different depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: The value of the house does not affect the payment of the appraiser; because of this, the appraiser has no preconceived interest in the cost of the house. What this means is he will render task with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: The replacement cost of the home is always is on par with the market value.

Fact: Market value is based on 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 necessary to rebuild a property is what shows the replacement cost.

Myth: There are certain ways that real estate appraisers use to show the opinion of value of a home, such as the price per square foot.

Fact: There are many varied processes that an appraiser will use to make a comprehensive investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable houses.

Myth: As homes increase their worth by a certain percentage - in a strong economic state - the properties nearby are expected to increase by the same amount.

Fact: All appreciation of worth is on an individual basis, determined by data on relevant considerations and the data of comparable properties. It makes no difference if the economy is powerful or bad.

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

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the data needed.

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

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, consumers must be supplied with a copy of the document upon written request, because of the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even worry about what the report contains so long as their lending company is fine with the contents therein.

Fact: It is almost imperative for home buyers to read a copy of their report so that they can verify the accuracy of the report, in case there is a 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 a great deal of information - 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.