Common myths about appraising

By law, an appraiser needs to be state-licensed to offer appraisals for federally-supported transactions. You also have the right to acquire a copy of the finished 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 must be the same as the market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Usually when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the Trent Woods have not been reassessed for years or more, it may vary wildly.

Myth: The appraised value of a property will change depending upon if the appraisal is conducted for the buyer or the seller.

Fact: The cost of the home does not affect the pay of the appraiser; as a result, the appraiser has no pressured interest in the cost of the property. What this means is he will provide services with impartiality and objectivity regardless for whom the appraisal is conducted.

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

Fact: The way market value is found is based on what a home 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 home were reconstructed, the dollar amount needed to do so would make up the replacement cost.

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

Fact: Appraisers make a comprehensive analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent costs of comparable houses.

Myth: As houses increase their worth by a certain percentage - in a robust economic state - the properties in proximity are figured to increase by the same amount.

Fact: Worth appreciation of a certain property must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant elements. It doesn't matter if the economy is doing well or declining.

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

Fact: To determine an accurate value beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these factors can be found just by looking at the house from the outside.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance real estate, you own the provided appraisal report.

Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. However, consumers have to be given a copy of the report upon written request, under 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 lending agency.

Fact: A consumer should definitely read through their appraisal; there will probably be some questions or some worries with the accuracy of the analysis that need to 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 report that should 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.