Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-related purchases. The law allows you to acquire a copy of your completed appraisal report from your lender after it has been produced. Contact us if you have any concerns about the appraisal procedure.

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

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Generally when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for a good length of time, it may vary wildly.

Myth: The value of a property will vary 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 analysis, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.

Myth: Market value will approximate replacement cost.

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. The replacement cost is the dollar amount required to reconstruct a home in-kind.

Myth: Appraisers use a calculation, like a specific price per square foot, to come to the worth of a property.

Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent values of comparable houses.

Myth: When the economy is doing well and the cost of houses are reported to be increasing by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.

Fact: All increase of worth is on an individual basis, determined by information on relevant considerations and the data of comparable properties. This is true in good economic times as well as poor.

Myth: Just looking at what the property looks like on its exterior gives an excellent idea of its worth.

Fact: To find an accurate price beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply looking at the property from the outside.

Myth: Since the consumer is the party who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given one by their lender.

Myth: There's no point for home buyers to even worry about what the report contains so long as their lending institution is fine with the contents therein.

Fact: Only if home buyers look over a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, containing useful and often-revealing 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 vicinity.