Appraisal myths debunked

By law, an appraiser is required to be state-licensed to perform appraisals for federally-related transactions. Also by law, you are allowed to request a copy of the completed report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value should always be the same as to market value.

Fact: It could be that , like most states, validates the idea that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. Often when interior remodeling has been done and the assessor is not aware of the improvement or properties in the have not been reassessed for quite a while, it may vary wildly.

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

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

Myth: Any time market value is found, it should be the same as the replacement cost of the home.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain home, with neither being under duress to buy or sell. If the property were rebuilt, the dollar amount necessary to do so would make up the replacement cost.

Myth: Certain methods, such as the price per square foot, are what appraisers use to ascertain the value of a property.

Fact: Appraisers make a full analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: In a strong economy - when the prices of homes in a given area are found to be increasing by a certain percentage - the worth of individual properties in the vicinity can be expected to rise by that same percentage.

Fact: All appreciation of value is on a case-by-case basis, determined by information on relevant elements and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.

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

Fact: Property worth is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just viewing the property from the outside.

Myth: Because consumers pay for appraisals when applying for loans to buy or refinance real estate, they legally own their appraisal report.

Fact: Legally, the document is owned by the lending agency unless the lender relinquishes their interest in the report. Home buyers must be given a copy of the document upon written request as per the Equal Credit Opportunity Act.

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

Fact: Only if consumers examine a copy of their appraisal report can they ensure 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 report makes an invaluable record for future reference, containing 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 area.