Common myths about appraising

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-supported purchases. You also have the right to demand a copy of the completed appraisal from your lending agency. Contact South Shore Realty Advisors, Inc if you have any concerns about the appraisal procedure.

Myth: Market value needs to be similar to the assessed value of the property.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an prolonged time.

Myth: Depending on if the appraisal is written for the buyer or the seller, the value of the property will vary.

Fact: The appraised value of the property does not affect the payment of the appraiser; due to this, the appraiser has no vested interest in the opinion of value of the house. Obviously, he will conduct business with impartiality and independence regardless for whom the appraisal is created.

Myth: Market value will approximate replacement cost.

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. The dollar amount required to rebuild a house is what shows the replacement cost.

Myth: Specific methods, like the price per square foot of the property, are the ways appraisers use to ascertain the cost of a home.

Fact: Appraisers make an exhaustive analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.

Myth: When the economy is on the rise and the worth of homes are reported to be rising by a certain percentage, the other properties in the neighborhood can be expected to increase based on that same percentage.

Fact: Any cost at which an appraiser concludes concerning a specific home is always individualized, based on certain factors derived from the information of comparable houses and other considerations within the house itself. It makes no difference if the economy is good or poor.

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

Fact: There are a number of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data required.

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

Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be given one by their lending agency.

Myth: Home buyers need not care about what is in their document so long as it exceeds the requirements of their lending agency.

Fact: Only if consumers examine a copy of their appraisal report 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 can serve as a record for the future, as it contains a great deal of data - 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.