Appraisal myths debunked

Legally, an appraiser needs to be state certified to write substantiated appraisal reports for federally-backed transactions. The law entitles you to get a copy of your completed appraisal report from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.

Fact: It might be that , like most states, supports the common myth that the assessed value is no different from the market value; however, this is not often the case. Often 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 years or more, it may vary wildly.

Myth: The buyer or the seller will have impact in the cost of the property depending upon for whom the appraiser is working.

Fact: There is no real 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 written.

Myth: Market value should equate to replacement cost.

Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a property without being under duress from any external party to purchase or sell. If the house were rebuilt, the dollar amount required to do so would form the replacement cost.

Myth: Specific formulae, like the price per square foot of the property, are the methods appraisers use to arrive at the price of a house.

Fact: There are many different processes that an appraiser will use to make a detailed investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable properties.

Myth: As properties increase their worth by a specific percentage - in a strong economic state - the properties around the appreciating properties are expected to increase by the same amount.

Fact: All appreciation of worth is on a case-by-case basis, concluded by data on relevant considerations and the data of comparable properties. It doesn't matter if the economy is doing well or declining.

Myth: You can commonly see what a property is worth simply by looking at the exterior.

Fact: To conclude an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the information necessary.

Myth: Since you're the one paying for the appraisal report when applying for the loan to buy or refinance your house, you own the provided appraisal report.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be provided with it by their lending company.

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the needs of their lender.

Fact: A consumer should definitely inspect their report; there will probably be some questions or some worries with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal that could be useful to the consumer in the future, such as 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.