Appraisal myths & facts

Legally, an appraiser needs to be state certified to write legitimate real estate appraisals for federally-supported sales. You also have the right to request a copy of the completed appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.

Myth: Assessed value should always be equal to market value.

Fact: While most states back the idea that assessed value equates estimated market value, this usually is not the case. Usually when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the neighborhood have not been reassessed for years or more, it may vary wildly.

Myth: The buyer or the seller sometimes may have impact in the cost of the home depending upon for whom the appraiser is working.

Fact: The appraiser has no vested interest in the result of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

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

Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. The dollar amount demanded to rebuild a home is what shows the replacement cost.

Myth: There are certain methods that appraisers use to determine the opinion of value of a house, such as the price per square foot.

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

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

Fact: Any price at which an appraiser arrives concerning a specific home is always individualized, based on certain factors concluded from the data of comparable homes and other specifications within the home itself. This is true in fair economic times as well as poor.

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

Fact: To determine an accurate worth beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply viewing the property from the exterior.

Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your home, you own the ordered appraisal report.

Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal report. However, home buyers have to be supplied with a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it meets the necessities of their lending agency.

Fact: Only if home buyers examine a copy of their 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 a near perfect record for future reference, filled with useful and often-revealing 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.

Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the worth of a house during a sales transaction involving a lending agency.

Fact: Appraisers can have many varied qualifications and designations which allow them to provide a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: There's no reason to get an appraisal if you have had a home inspection.

Fact: An appraisal does not serve the same purpose as an inspection. The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. A home inspector analyzes the condition of the building and its major components and reports their findings.