Appraisal myths debunked

Legally, an appraiser needs to be state certified to write substantiated real estate appraisals for federally-supported transactions. You also have the right to request a copy of the finished report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

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 concept that the assessed value is the same as market value, but not always. Usually when interior remodeling has been done and the assessor is unaware of the improvement or properties in the Sun City West have not been reassessed for quite a while, it may vary wildly.

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

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

Myth: Market value will equal replacement cost.

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

Myth: Specific methods, such as the price per square foot, are the methods appraisers use to ascertain the worth of a home.

Fact: There are many numerous ways that an appraiser will use to make an in-depth analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable houses.

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

Fact: Value appreciation of a specific home is always concluded on an individualized basis, factoring in information on comparable homes and other relevant specifications within the house itself. It doesn't matter if the economy is on the rise or declining.

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

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

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

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

Myth: There's no reason for consumers to even worry about what the appraisal contains so long as their lender is fine with the contents therein.

Fact: A home buyer should definitely look through their appraisal; there could be some questions or some concerns about the accuracy of the appraisal that must be addressed. 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, filled with 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.