Common myths about appraising

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-supported sales. Also by law, you are entitled to demand a copy of the completed appraisal from your lending agency. Contact us if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.

Fact: This is not often the case; 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 happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended period of time.

Myth: Depending on whether the appraisal is written for the buyer or the seller, the value of the house will vary.

Fact: The appraiser has no vested interest in the result of the appraisal report and should render 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 house.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under undue influence to buy or sell. The dollar amount demanded to rebuild a property is what forms the replacement cost.

Myth: There are specific methods that appraisers use to show the value of a house, like the price per square foot.

Fact: An appraisal is an amalgamation of data concluded from the house's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can depend on Appraisal Professionals's staff to be professional in assessing this data.

Myth: As houses appreciate by a certain percentage - in a robust economic state - the homes within the same neighborhood are expected to increase by the same amount.

Fact: Any price at which an appraiser concludes in regards to a certain property is always individualized, based on certain factors pulled from the information of comparable homes and other specifications within the home itself. This is true in strong economic times as well as poor.

Myth: The house's outside is determinate of the actual worth of the home; there is no need to do an interior appraisal.

Fact: There are a number of different variables 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 data necessary.

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

Fact: Legally, the document is owned by the lending company unless the lender releases their interest in the document. However, home buyers must be provided with a copy of the report upon written request, under 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 lender.

Fact: It is very important for home buyers to peruse a copy of their appraisal report so that they can double-check the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored in an appraisal report that can 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 region.