Appraisal myths & facts

Legally, a real estate appraiser is required to be state certified to perform substantiated real estate appraisals for federally-backed sales. You also have the right to demand a copy of the finished appraisal report from your lending agency. Contact Astute Appraisals, Inc. if you have any questions about the appraisal process.

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

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 lack of reassessment on nearby properties are exact examples of why this occurs.

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

Fact: The opinion of value of the home does not affect the salary of the appraiser; as a result, the appraiser has no vested interest in the cost of the property. What this means is he will complete his business with impartiality and objectivity regardless for whom the appraisal is conducted.

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

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under duress to buy or sell. The dollar amount required to rebuild a house is what shows the replacement cost.

Myth: Certain formulae, like the price per square foot, are the methods appraisers use to arrive at the worth of a property.

Fact: Appraisers complete a detailed analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.

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

Fact: Any worth at which an appraiser arrives concerning a specific house is always personalized, based on certain factors concluded from the information of comparable homes and other considerations within the home itself. This is true in excellent economic times as well as bad.

Myth: Just seeing what the house looks like on its exterior gives an idea of its worth.

Fact: There are a multitude of different factors that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply looking at the home from the outside.

Myth: Since you're the one providing the money for the appraisal report when applying for the loan to buy or refinance real estate, you own the provided appraisal report.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the needs of their lending agency.

Fact: Only if consumers check out a copy of their appraisal report can they double-check 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 appraisal makes a valuable record for future reference, containing 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 vicinity.