Appraisal myths & facts

By law, an appraiser is required to be state-licensed to offer appraisals for federally-related transactions. You have the ability to receive a copy of the completed appraisal report from your lender. Contact Appraisal-One if you have any questions about the appraisal process.

Myth: Market value will be equivocal to the assessed value of the property.

Fact: While most states support the suggestion that assessed value is the same as estimated market value, this often is not the case. Generally when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: The opinion of value of a property will change depending upon if the appraisal is produced for the buyer or the seller.

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

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

Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. If the home were rebuilt, the dollar amount required to do so would set the replacement cost.

Myth: Specific methods, like the price per square foot of the property, are the ways appraisers use to come to the worth of a home.

Fact: Appraisers complete a detailed analysis of all factors pertaining to the cost of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.

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

Fact: Price increase of a certain house has to be concluded on an individualized basis, factoring in information on comparable houses and other relevant specifications within the property itself. It makes no difference whether the economy is good or poor.

Myth: Just examining what the house looks like on its exterior gives an excellent idea of its value.

Fact: To determine an accurate worth beyond all doubt, an appraiser must examine the house on a variety of factors based on area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by examining the house from the outside.

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

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Consumers must be given a copy of the document through request as per the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even concern themselves with what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: It is almost imperative for home buyers to look at a copy of their appraisal so that they can verify 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. An appraisal can double as a record for the future, containing a great deal of information - 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 proximity.