Appraisal myths & facts

By law, an appraiser is required to be state-licensed to produce appraisals for federally-supported sales. Also by law, you are allowed to receive a copy of the completed report from your lending agency. Contact us if you have any questions about the appraisal process.

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

Fact: It is possible that Illinois, like most states, validates the suggestion that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an prolonged period of time.

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

Fact: The cost of the property does not affect the salary of the appraiser; because of this, the appraiser has no preconceived interest in the value of the house. This means that he will render business with impartiality and objectivity regardless for whom the appraisal is conducted.

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

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under undue influence to buy or sell. If the house were rebuilt, the dollar amount required to do so would make up the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to figure out the value of a home.

Fact: An appraisal is an assertion of information concluded from the property's size, location, proximity to specific facilities, the condition of the property and the price of recent comparable sales. You can rely on Corrie Appraisal & Consulting, Inc.'s staff to be forthright in assessing this information.

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

Fact: Any cost at which an appraiser concludes in regards to a particular home is always personalized, based on certain factors found from the data of comparable properties and other considerations within the property itself. It doesn't matter if the economy is doing well or declining.

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

Fact: House worth is concluded by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data needed.

Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your house, you own the ordered appraisal report.

Fact: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. By the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given one by their lending agency.

Myth: Home buyers need not care about what is in their report so long as it meets the requirements of their lending group.

Fact: It is almost imperative for consumers to check over a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent 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 vicinity.