Appraisal myths & facts

Legally, a real estate appraiser is required to be state certified to create substantiated real estate appraisals for federally-supported sales. Also by law, you have the right to request a copy of the finished appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.

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

Fact: While most states uphold the suggestion that assessed value approximates estimated market value, this commonly is not the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an prolonged period.

Myth: The value of a house will differ depending upon if the appraisal is ordered for the buyer or the seller.

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

Myth: The replacement value of the property should be is on par with the market value.

Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. If the home were rebuilt, the dollar amount required to do so would be the replacement cost.

Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the cost of a home.

Fact: There are many varied methods that an appraiser will use to make a comprehensive analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable homes.

Myth: As houses appreciate by a certain percentage - in a robust economy - the houses within the same neighborhood are figured to appreciate by the same amount.

Fact: All appreciation of value is on an individual basis, concluded by data on relevant conditions and the data of comparable homes. This is true in strong economic times as well as poor.

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

Fact: There are a multitude of different variables that conclude property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply inspecting the property from the exterior.

Myth: Because the consumer is the one who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.

Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Consumers must be supplied with a version of the appraisal report through request as per the Equal Credit Opportunity Act.

Myth: There's no need for home buyers to even concern themselves with what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: Only if consumers look over a copy of their appraisal report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing an incredible amount of 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 proximity.