Appraisal myths debunked

It is enforced by law that an appraiser needs to be state-licensed to offer appraisal reports for federally-related property transactions in North Carolina. The law allows you to receive a copy of your completed appraisal report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.

Myth: Market value must be the same as the assessed value of the property.

Fact: While most states support the idea that assessed value equates estimated market value, this usually is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged time.

Myth: The appraised value of a property will change depending upon if the appraisal is provided for the buyer or the seller.

Fact: The price of the property does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the value of the house. This means that he will complete his business with impartiality and independence regardless for whom the appraisal is conducted.

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

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain house, with neither being under pressure to buy or sell. If the property were rebuilt, the dollar amount needed to do so would set the replacement cost.

Myth: Specific methods, such as the price per square foot of the property, are the ways appraisers use to arrive at the value of a house.

Fact: Appraisers make a comprehensive analysis of all factors pertaining to the cost of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.

Myth: When the economy is strong and the cost of houses are reported to be rising by a certain percentage, the other homes in the area can be expected to increase based on that same percentage.

Fact: All increase of worth is on a one-on-one basis, concluded by information on relevant elements and the data of comparable properties. It makes no difference if the economy is good or bad.

Myth: Just examining what the house looks like on its exterior gives an idea of its worth.

Fact: There are a number of different factors that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply examining the house from the outside.

Myth: Since the consumer is the party who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.

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

Myth: Home buyers need not be concerned with what is in their appraisal report so long as it satisfies the necessities of their lending company.

Fact: A home buyer should definitely inspect their report; there will probably be some questions or some worries with the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an appraisal that will probably be useful to the home buyer 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 area.