Common myths about appraising

It is mandated by law that an appraiser is required to be state-licensed to create appraisal reports for federally-related home transactions in Maryland. Also by law, you are entitled to demand a copy of the finished appraisal from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser should be equivalent to the market value.

Fact: While most states back the concept that assessed value is the same as estimated market value, this commonly is not the case. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an extended period.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.

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

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

Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a house without being under influence from any external party to purchase or sell. If the property were reconstructed, the dollar amount necessary to do so would be the replacement cost.

Myth: Certain formulae, like the price per square foot, are the ways appraisers use to come to the cost of a property.

Fact: An appraisal is an assertion of data based on the house's size, location, proximity to some facilities, the condition of the home and the price of recent comparable sales. You can depend on Astute Appraisals, Inc.'s staff to be professional in assessing this information.

Myth: In a robust economy - when the values of properties in a given area are reported to be rising by a particular percentage - the costs of individual homes in the vicinity can be expected to increase by that same percentage.

Fact: Cost increase of a specific house is always determined on an individualized basis, factoring in information on comparable properties and other relevant specifications within the house itself. This is true in fair economic times as well as poor.

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

Fact: There are a number of different variables that conclude property value; these factors include location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data required.

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

Fact: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the document. Consumers have to be given a copy of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their appraisal so long as it exceeds the needs of their lending group.

Fact: Only if home buyers read a copy of their appraisal 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. An appraisal report can serve as a record for the future, since it contains a great deal of data - including, but certainly 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 area.