Appraisal myths debunked

Legally, an appraiser must be state certified to perform substantiated appraisal reports for federally-related transactions. Also by law, you are entitled to request a copy of the finished appraisal from your lending agency. Contact us if you have any concerns about the appraisal process.

Myth: Market value has to be equivocal to 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. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an extended time.

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

Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is written.

Myth: Any time market value is found, it should be similar to the replacement cost of the property.

Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home. If the house were rebuilt, the dollar amount needed to do so would set the replacement cost.

Myth: There are specific ways that appraisers use to determine the cost of a property, such as the price per square foot.

Fact: Appraisers make a full analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.

Myth: In a powerful economy - when the sales prices of properties in a given county are found to be increasing by a certain percentage - the prices of individual houses in the vicinity can be expected to increase by that same percentage.

Fact: Any worth at which an appraiser concludes in regards to a particular property is always individualized, based on certain factors concluded from the information of comparable houses and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.

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

Fact: To find an accurate value beyond all doubt, an appraiser must inspect the home 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 looking at the house from the outside.

Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their house, they legally own their appraisal.

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

Myth: Home buyers need not worry about what is in their report so long as it exceeds the requirements of their lending agency.

Fact: Only if home buyers examine a copy of their appraisal 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. There is a great deal of information stored in an appraisal that should 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 region.