Appraisal myths debunked

Legally, a real estate appraiser is required to be state certified to write substantiated appraisal reports for federally-supported sales. You are also entitled by law to acquire a copy of the finished report from your lending agency. Contact us if you have any concerns about the appraisal procedure.

Myth: Market value should be similar to the assessed value of the property.

Fact: It might be that Maryland, like most states, supports the common myth that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an prolonged period.

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

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

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

Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home. The dollar amount required to reconstruct a house is what constitutes the replacement cost.

Myth: There are specific ways that real estate appraisers use to show the value of a house, like the price per square foot.

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

Myth: When the economy is strong and the cost of houses are reported to be increasing by a certain percentage, the other homes in the neighborhood can be expected to increase based on that same percentage.

Fact: Worth increase of a specific house has to be concluded on an individualized basis, factoring in information on comparable houses and other relevant specifications within the house itself. This is true in good economic times as well as poor.

Myth: You can usually find what a property is worth simply by looking at the outside.

Fact: Property worth is determined by a number of factors, including area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the information needed.

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

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. Consumers must be supplied with a version of the report through request due to the Equal Credit Opportunity Act.

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

Fact: A consumer should definitely inspect their report; there could be some questions or some worries about the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an report that will probably 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 vicinity.