Appraisal myths debunked

It is required by law that an appraiser is required to be state-licensed to perform appraisals for federally-related home transactions in . Also by law, you have the ability to request a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal process.

Myth: Market value has to be the same as the assessed value of the property.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are excellent examples of why the price can vary.

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

Fact: The value of the house does not affect the payment of the appraiser; as such, the appraiser has no personal interest in the worth of the property. This means that he will render task with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: Any time market value is established, it should equal the replacement cost of the property.

Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under undue influence to buy or sell. The dollar amount required to reconstruct a property is what constitutes the replacement cost.

Myth: There are certain methods that appraisers use to determine the cost of a house, like the price per square foot.

Fact: There are many numerous formulae that an appraiser will use to make a full investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable homes.

Myth: As homes appreciate by a certain percentage - in a strong economic state - the properties around the appreciating properties are figured to increase by the same amount.

Fact: Price increase of a specific house has to be concluded on a case-by-case basis, factoring in data on comparable homes and other relevant elements. This is true in good economic times as well as bad.

Myth: The property's exterior is determinate of the actual price of the house; there is no need to do an interior appraisal.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the data required.

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

Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal report. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given one by their lender.

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

Fact: A home buyer should definitely look through their appraisal; there will probably be some questions or some worries about the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, comprised of useful and often-revealing data - 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.