Common myths about appraising

By law, an appraiser must be state-licensed to produce appraisals for federally-related sales. The law allows you to acquire a copy of your completed appraisal from your lending agency after it has been provided. Contact our professional staff 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 suggestion that assessed value approximates estimated market value, this generally is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are prime examples of why the price can vary.

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

Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.

Myth: Market value will be the same as replacement cost.

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a home without being under influence from any external party to purchase or sell. Replacement value is the dollar amount required to reconstruct a property in-kind.

Myth: There are certain methods that appraisers use to find the cost of a house, like the price per square foot.

Fact: An appraisal report is an amalgamation of information based on the house's size, location, proximity to specific facilities, the condition of the home and the cost of recent comparable sales. You can depend on West Valley Appraisal Services's staff to be honest in assessing this information.

Myth: As houses appreciate by a certain percentage - in a robust economy - the houses around the appreciating properties are expected to increase by the same amount.

Fact: All increase of value is on a one-on-one basis, determined by information on relevant conditions and the data of comparable houses. This is true in fair economic times as well as poor.

Myth: You can often find what a house is worth simply by looking at the outside.

Fact: There are a multitude of different variables that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived just by viewing the property from the outside.

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

Fact: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the report. However, consumers have to be provided with a copy of the report upon written request, under the Equal Credit Opportunity Act.

Myth: Consumers need not care about what is in their appraisal document so long as it exceeds the necessities of their lending agency.

Fact: A consumer should definitely inspect their report; there could be some questions or some worries with the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, containing helpful and often-revealing data - 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 proximity.