Appraisal myths & facts

Legally, a real estate appraiser has to be state certified to produce legitimate appraisal reports for federally-related sales. You are also entitled by law to demand a copy of the finished appraisal report from your lender. Contact Weaver Appraisal Group if you have any concerns about the appraisal process.

Myth: Assessed value should always be equal to market value.

Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this commonly is not the case. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby properties are perfect examples of why there might be a differential in price.

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

Fact: The appraiser has no personal interest in the result of the report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: The replacement cost of the property will 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 particular house, with neither being under duress to buy or sell. If the home were rebuilt, the dollar amount required to do so would be the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the value of a home.

Fact: Appraisers make a comprehensive analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent worth of comparable properties.

Myth: As properties increase their worth by a specific percentage - in a robust economy - the properties nearby are figured to increase by the same amount.

Fact: Cost appreciation of a certain property must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. This is true in excellent economic times as well as bad.

Myth: The house's exterior is determinate of the actual worth of the property; there is no need to do an interior inspection.

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

Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance real estate, you own the provided appraisal report.

Fact: Legally, the document is owned by the lender unless the lender releases their interest in the appraisal. However, consumers must be supplied with a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even care about what the appraisal report contains so long as their lender is satisfied.

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