Appraisal myths & facts

By law, an appraiser must be state-licensed to perform appraisals for federally-backed purchases. The law gives you the right to acquire a copy of your finished report from your lender after it has been provided. Contact us if you have any questions about the appraisal procedure.

Myth: Market value will always be the same as the assessed value of the property.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are prime examples of why there might be a differential in price.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the appraised value of the house will vary.

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

Myth: The replacement cost of the property is always is on par with the market value.

Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside party to buy or sell. The dollar amount demanded to rebuild a house is what shows the replacement cost.

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

Fact: There are many differing calculations that an appraiser will use to make a full investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable homes.

Myth: As homes appreciate by a certain percentage - in a strong economic state - the homes nearby are figured to appreciate by the same amount.

Fact: Any worth at which an appraiser arrives in regards to a certain property is always personalized, based on certain factors pulled from the information of comparable homes and other specifications within the house itself. This is true in strong economic times as well as bad.

Myth: Just looking at what the house looks like on the outside gives a good idea of its value.

Fact: Home worth is determined by a multitude of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived simply by examining the home from the exterior.

Myth: Since you're the one providing the money for the appraisal report when applying for the loan to purchase or refinance your house, you own the ordered appraisal.

Fact: Legally, the report is owned by the lender unless the lender releases their interest in the document. Consumers must be provided with a copy of the report through request due to 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: It is almost imperative for home buyers to peruse a copy of their appraisal report so that they can verify the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an appraisal that can be useful to the home buyer 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 vicinity.