Appraisal myths debunked

Legally, an appraiser is required to be state certified to create legitimate appraisal reports for federally-backed purchase. You have the ability to demand a copy of the finished appraisal from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Market value will be the same as the assessed value of the property.

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. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby houses are prime examples of why there might be a differential in price.

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

Fact: The appraiser has no personal interest in the outcome of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is found, it should equate to the replacement cost of the property.

Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. If the home were reconstructed, the dollar amount necessary to do so would form the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the value of a home.

Fact: There are many different formulae that an appraiser will use to make an in-depth investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable homes.

Myth: When the economy is on the rise and the value of properties are found to be rising by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.

Fact: Any price at which an appraiser arrives in regards to a particular home is always personalized, based on certain factors concluded from the information of comparable houses and other considerations within the house itself. This is true in fair economic times as well as bad.

Myth: The property's outside is determinate of the actual price of the property; it is unnecessary to do an interior inspection.

Fact: Home worth is determined by a multitude of factors, including area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived just by viewing the house from the outside.

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

Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. Home buyers must be given a version of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the requirements of their lending agency.

Fact: A home buyer should definitely read through their appraisal report; there could be some questions or some concerns about the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, filled with 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 vicinity.