Appraisal myths debunked

Legally, a real estate appraiser must be state certified to write legitimate real estate appraisals for federally-supported transactions. The law gives you the right to get a copy of your completed appraisal from your lending agency after it has been provided. Contact South Shore Realty Advisors, Inc if you have any questions about the appraisal process.

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

Fact: While most states back the concept that assessed value equates estimated market value, this usually is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are prime examples of why the price can vary.

Myth: The buyer or the seller can have some pull in the value of the home depending upon for whom the appraiser is working.

Fact: The appraiser has no vested interest in the outcome of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value should equal replacement cost.

Fact: Market value is based on what a willing buyer would likely pay a willing seller for a particular home, with neither being under duress to buy or sell. If the home were reconstructed, the dollar amount required to do so would be the replacement cost.

Myth: There are certain methods that real estate appraisers use to find the opinion of value of a home, like the price per square foot.

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

Myth: In a powerful economy - when the prices of houses in a given neighborhood are found to be rising by a certain percentage - the prices of individual homes in the vicinity can be expected to appreciate by that same percentage.

Fact: Any cost at which an appraiser concludes concerning a certain home is always personalized, based on certain factors concluded 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: Just looking at what the house looks like on its exterior gives a good idea of its worth.

Fact: To find an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by inspecting the home from the outside.

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

Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the report. Consumers must be given a copy of the report through request because of the Equal Credit Opportunity Act.

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

Fact: A consumer should definitely inspect their document; there could 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. There is a wealth of data stored in an appraisal that will probably be useful to the consumer in the future, such as 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 vicinity.