Common myths about appraising

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-backed sales. You have the ability to receive a copy of the completed appraisal report from your lending agency. Contact if you have any concerns about the appraisal process.

Myth: Market value should be similar to the assessed value of the property.

Fact: This is not often the case; most states do support the suggestion 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 houses are exact examples of why the price can vary.

Myth: Depending on whether the appraisal is done for the buyer or the seller, the cost of the property will vary.

Fact: The appraiser has no personal interest in the outcome of the appraisal and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value should equal replacement cost.

Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. Replacement cost is the dollar amount needed to reconstruct a home in-kind.

Myth: Specific formulae, such as the price per square foot, are the methods appraisers use to determine the cost of a house.

Fact: An appraisal is an amalgamation of data concluded from the house's size, location, proximity to some facilities, the condition of the property and the value of recent comparable sales. You can count on 's staff to be forthright in assessing this information.

Myth: In a powerful economy - when the prices of properties in a given neighborhood are found to be appreciating by a particular percentage - the values of individual houses in the vicinity can be expected to rise by that same percentage.

Fact: All appreciation of price is on an individual basis, concluded by information on relevant elements and the data of comparable homes. This is true in strong economic times as well as poor.

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

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

Myth: Considering that the consumer is the one who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

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

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the requirements of their lender.

Fact: A consumer should definitely read through their report; there may be some questions or some worries with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an report that can be useful to the home buyer 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 proximity.