Appraisal myths & facts

Legally, an appraiser is required to be state certified to produce legitimate appraisal reports for federally-backed sales. You also have the right to demand a copy of the finished appraisal from your lending agency. Contact us if you have any questions about the appraisal process.

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

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are excellent examples of why there might be a differential in price.

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

Fact: The price of the property does not affect the payment of the appraiser; because of this, the appraiser has no preconceived interest in the worth of the home. This means that he will provide services with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Any time market value is found, it should equal the replacement cost of the property.

Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. If the home were reconstructed, the dollar amount required to do so would make up the replacement cost.

Myth: Certain methods, like the price per square foot, are the ways appraisers use to ascertain the value of a house.

Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: As homes increase their worth by a certain percentage - in a strong economy - the properties around the appreciating properties are expected to appreciate by the same amount.

Fact: Any value at which an appraiser arrives in regards to a particular home is always individualized, based on certain factors derived from the data of comparable properties and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.

Myth: The home's outside is determinate of the actual value of the property; there is no need to do an interior appraisal.

Fact: Home value is determined by a number of factors, including area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data required.

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

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending company that ordered the appraisal. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given one by their lending company.

Myth: There's no point for home buyers to even worry about what the appraisal report contains so long as their lending agency is fine with the contents therein.

Fact: A consumer should definitely read through their appraisal report; there may be some questions or some concerns about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, comprised of helpful 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 area.