Appraisal myths debunked

Legally, a real estate appraiser is required to be state certified to write substantiated real estate appraisals for federally-related purchase. The law entitles you to receive a copy of your completed report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal procedure.

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

Fact: While most states support the concept that assessed value equates estimated market value, this usually is not the case. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby homes are prime examples of why there might be a differential in price.

Myth: The buyer or the seller sometimes may have leverage in the value of the home depending upon for whom the appraiser is working.

Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is conducted.

Myth: The replacement value of the property should be is on par with the market value.

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

Myth: Appraisers use a formula, such as a certain price per square foot, to arrive at the value of a home.

Fact: An appraisal report is an amalgamation of information based on the home's size, location, proximity to some facilities, the condition of the house and the cost of recent comparable sales. You can rely on Mike Noble Appraisals's appraisers to be forthright in assessing this information.

Myth: In a robust economy - when the worth of properties in a given area are found to be appreciating by a particular percentage - the costs of individual properties in the proximity can be expected to rise by that same percentage.

Fact: Cost appreciation of a specific home has to be concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. This is true in strong economic times as well as bad.

Myth: You can generally tell what a home is worth simply by looking at the exterior.

Fact: To find an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. An outside-only inspection certainly can't provide all of the data required.

Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their house, they own their appraisal report.

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even worry about what the report contains so long as their lending institution is satisfied.

Fact: Only if consumers look over a copy of their appraisal can they verify 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 a great deal of information - including, but certainly 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 proximity.