Common myths about appraising

Legally, a real estate appraiser needs to be state certified to create legitimate appraisal reports for federally-backed sales. The law allows you to receive a copy of your completed appraisal report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value will always be the same as to market value.

Fact: It could be that Illinois, like most states, supports the idea that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged time.

Myth: The appraised value of a house will be different depending upon if the appraisal is ordered for the buyer or the seller.

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

Myth: Market value should be the same as replacement cost.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under undue influence to buy or sell. If the home were rebuilt, the dollar amount needed to do so would set the replacement cost.

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

Fact: An appraisal report is a collection of information concluded from the property's size, location, proximity to specific facilities, the condition of the home and the value of recent comparable sales. You can rely on Corrie Appraisal & Consulting, Inc.'s staff to be ethical in assessing this data.

Myth: When the economy is doing well and the sales prices of homes are reported to be rising by a certain percentage, the other homes in the vicinity can be expected to increase based on that same percentage.

Fact: Any value at which an appraiser arrives concerning a specific house is always personalized, based on certain factors concluded from the information of comparable houses and other considerations within the property itself. It makes no difference whether the economy is strong or poor.

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Myth: You can generally see what a house is worth simply by looking at the outside.

Fact: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the information required.

Myth: Since you're the one providing the money for the appraisal report when applying for your loan to purchase or refinance your home, you own the provided appraisal report.

Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the appraisal. Consumers must be provided with a version of the appraisal report through request due to the Equal Credit Opportunity Act.

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

Fact: It is very important for home buyers to look at a copy of their appraisal so that they can verify the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, comprised of helpful and often-revealing data - including 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 area.

Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the price of a home during a sales transaction involving a lending company.

Fact: Based upon their qualifications and designations, appraisers can and often do perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: A home inspection has a completely different purpose than an appraisal report. The appraiser concludes on an opinion of value in the appraisal process and resulting report. The point of a home inspector is to approximate the condition of the house and its main components, then create a report on these conclusions.