Appraisal myths debunked

Legally, a real estate appraiser must be state certified to perform legitimate real estate appraisals for federally-supported transactions. Also by law, you have the right to request a copy of the completed report from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value should be similar to to market value.

Fact: While most states support the concept that assessed value equates estimated market value, this generally is not the case. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are perfect examples of why the price can vary.

Myth: The value of a home will change depending upon if the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no vested interest in the result of the report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value should equate to replacement cost.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular property, with neither being under undue influence to buy or sell. If the home were rebuilt, the dollar amount required to do so would make up the replacement cost.

Myth: There are certain ways that appraisers use to find the opinion of value of a property, like the price per square foot.

Fact: An appraisal is an assertion of data concluded from the property's size, location, proximity to undesirable facilities, the condition of the property and the value of recent comparable sales. You can count on Appraisal-One's appraisers to be honest in assessing this information.

Myth: In a robust economy - when the prices of houses in a given county are found to be appreciating by a particular percentage - the values of individual properties in the proximity can be expected to appreciate by that same percentage.

Fact: Any value at which an appraiser arrives concerning a particular house is always personalized, based on certain factors derived from the information of comparable homes and other considerations within the home itself. This is true in excellent economic times as well as poor.

Myth: Just seeing what the property looks like on the outside gives an excellent idea of its cost.

Fact: Home value is concluded by a number of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by examining the home from the exterior.

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

Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. However, consumers must be given a copy of the document upon written request, due to the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the necessities of their lending company.

Fact: It is very important for consumers to read a copy of their report so that they can double-check the accuracy of the document, 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. Also, the report makes a valuable record for future reference, comprised of useful and often-revealing information - including 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.