Appraisal myths debunked

Legally, an appraiser must be state certified to write substantiated appraisal reports for federally-backed transactions. The law gives you the right to get a copy of your completed report from your lending agency after it has been produced. Contact Elite Appraisal Services if you have any concerns about the appraisal process.

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

Fact: While most states support the suggestion that assessed value equates estimated market value, this often is not the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended period.

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

Fact: The value of the property does not affect the pay of the appraiser; as such, the appraiser has no preconceived interest in the value of the property. What this means is he will complete his services with impartiality and independence regardless for whom the appraisal is produced.

Myth: Any time market value is established, it should equate to the replacement cost of the home.

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. If the house were rebuilt, the dollar amount needed to do so would form the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to come to the value of a home.

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

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

Fact: Value appreciation of a certain property must be concluded on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. It makes no difference if the economy is good or terrible.

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

Fact: There are a multitude of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply viewing the house from the exterior.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they legally own their appraisal report.

Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report. Home buyers must be supplied with a copy of the report through request because of the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the report so long as it meets the requirements of their lending agency.

Fact: It is very important for consumers to read a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, filled with helpful and often-revealing information - including, but 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 vicinity.