Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to produce substantiated appraisal reports for federally-supported sales. The law entitles you to get a copy of your completed appraisal from your lending agency after it has been provided. Contact Corrie Appraisal & Consulting, Inc. if you have any questions about the appraisal process.

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

Fact: While most states support the idea that assessed value is equal to estimated market value, this usually is not the case. Sometimes when interior remodeling has been done and the assessor is not aware of the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller can have an influence in the cost of the property depending upon for whom the appraiser is working.

Fact: The appraised value of the home does not affect the pay of the appraiser; because of this, the appraiser has no vested interest in the worth of the home. What this means is he will provide services with impartiality and objectivity regardless for whom the appraisal is created.

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

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 particular home. If the house were rebuilt, the dollar amount required to do so would be the replacement cost.

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

Fact: An appraisal is an assertion of data based on the home's size, location, proximity to certain facilities, the condition of the property and the value of recent comparable sales. You can depend on Corrie Appraisal & Consulting, Inc.'s staff to be honest in assessing this information.

Myth: As houses appreciate by a specific percentage - in a strong economic state - the houses within the same neighborhood are figured to increase by the same amount.

Fact: Any value at which an appraiser concludes in regards to a certain house is always personalized, based on certain factors derived from the information of comparable homes and other considerations within the house itself. This is true in strong economic times as well as bad.

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

Fact: To determine an accurate value beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information needed.

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

Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal report. Home buyers must be given a copy of the document through request because of the Equal Credit Opportunity Act.

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

Fact: Only if home buyers look at a copy of their appraisal report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, containing an exorbitant amount of 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 area.

Myth: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender-based sales transaction.

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

Myth: You don't need to get an appraisal if you get a home inspection.

Fact: A home inspection report has a completely different purpose than an appraisal. The job of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. A home inspector determines the condition of the property and its major components and reports these findings.