Common myths about appraising

Legally, a real estate appraiser needs to be state certified to create legitimate appraisal reports for federally-supported transactions. Also by law, you are allowed to demand a copy of the completed report from your lender. Contact us if you have any questions about the appraisal procedure.

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

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby properties are exact examples of why this occurs.

Myth: The opinion of value of a property will vary depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The price of the house does not affect the payment of the appraiser; due to this, the appraiser has no personal interest in the worth of the home. What this means is he will complete his services with impartiality and independence regardless for whom the appraisal is produced.

Myth: Market value should equal replacement cost.

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under pressure from any outside party to buy or sell. Replacement value is the dollar amount required to rebuild a home in-kind.

Myth: There are specific methods that appraisers use to determine the value of a property, like the price per square foot.

Fact: An appraisal report is an amalgamation of data concluded from the property's size, location, proximity to certain facilities, the condition of the house and the value of recent comparable sales. You can depend on Anderson Appraisal, LLC's staff to be honest in assessing this information.

Myth: In a robust economy - when the prices of properties in a given area are found to be appreciating by a certain percentage - the values of individual homes in the vicinity can be expected to appreciate by that same percentage.

Fact: Any price at which an appraiser concludes in regards to a certain house is always individualized, based on certain factors concluded from the data of comparable houses and other specifications within the property itself. This is true in fair economic times as well as bad.

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

Fact: Home worth is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply examining the property from the outside.

Myth: Since the consumer is the party who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with it by their lending company.

Myth: Consumers need not worry about what is in their document so long as it meets the necessities of their lending agency.

Fact: A home buyer should definitely look through their appraisal report; there will probably be some questions or some worries about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained 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 vicinity.

Myth: Appraisers are hired only to estimate home values in property sales involving mortgage-lending transactions.

Fact: Appraisers can have many varied qualifications and designations which allow them to provide a variety of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: An appraisal is no different than a home inspection.

Fact: A home inspection report has a completely different purpose than an appraisal report. An appraiser concludes on an opinion of value in the appraisal process and resulting report. A home inspector analyzes the condition of the house and its major components and reports their findings.