Appraisal myths & facts

By law, an appraiser is required to be state-licensed to produce appraisals for federally-supported purchases. You are also entitled by law to demand a copy of the finished report from your lending agency. Contact Corrie Appraisal & Consulting, Inc. if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser must be exactly the same as the market value.

Fact: This usually isn't true; most states do support the suggestion 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 area have not been reassessed for an extended period of time.

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

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: The replacement value of the home will be is on par with the market value.

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 property without being under pressure from any external group to buy or sell. The dollar amount needed to reconstruct a home is what forms the replacement cost.

Myth: There are specific methods that appraisers use to find the cost of a house, like the price per square foot.

Fact: There are many different ways that an appraiser will use to make a detailed investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable houses.

Myth: As houses appreciate by a specific percentage - in a strong economy - the homes around the appreciating properties are figured to appreciate by the same amount.

Fact: Worth increase of a specific property has to be determined on a case-by-case basis, factoring in data on comparable homes and other relevant specifications within the home itself. It makes no difference whether the economy is excellent or terrible.

Myth: The property's outside is determinate of the actual price of the house; it is unnecessary to do an interior appraisal.

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

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

Fact: Legally, the document is owned by the lending company unless the lender releases their interest in the report. However, consumers have to be provided with a copy of the report upon written request, due to the Equal Credit Opportunity Act.

Myth: There's no need for consumers to even concern themselves with what the report contains so long as their lending agency is satisfied.

Fact: A home buyer should definitely inspect their appraisal report; there will probably be some questions or some worries about the accuracy of the inspection 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, 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.