Common myths about appraising

By law, an appraiser needs to be state-licensed to offer appraisals for federally-related purchases. You are also entitled by law to request a copy of the completed appraisal from your lender. Contact us if you have any concerns about the appraisal process.

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

Fact: While most states uphold the concept that assessed value equates estimated market value, this usually is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged time.

Myth: The value of a house will vary depending upon whether the appraisal is provided for the buyer or the seller.

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

Myth: Market value will approximate replacement cost.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under duress to buy or sell. If the home were reconstructed, the dollar amount necessary to do so would be the replacement cost.

Myth: Specific formulae, such as the price per square foot of the property, are the ways appraisers use to determine the cost of a property.

Fact: An appraisal report is a collection of information concluded from the property's size, location, proximity to specific facilities, the condition of the house and the value of recent comparable sales. You can count on Appraisal Professionals's appraisers to be ethical in assessing this data.

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

Fact: Any cost at which an appraiser arrives concerning a particular house is always personalized, based on certain factors concluded from the data of comparable houses and other considerations within the house itself. It makes no difference whether the economy is good or terrible.

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

Fact: There are a number of different factors that conclude property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by inspecting the house from the exterior.

Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to buy or refinance your house, you own the ordered appraisal.

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

Myth: Consumers need not be concerned with what is in their appraisal report so long as it exceeds the requirements of their lending company.

Fact: It is very important for consumers to check over a copy of their appraisal so that they can double-check the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, containing an incredible amount of information - including, but certainly 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.

Myth: The only reason someone would hire an appraiser is if a property needs its price assessed in a lender-based sales transaction.

Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: You don't have to get an appraisal if you get a home inspection.

Fact: An appraisal report does not serve the same purpose as an inspection report. The function of an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector determines the condition of the home and its major components and reports their findings.