Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related sales. You have the ability to receive a copy of the completed report from your lender. Cardinal Appraisal & Property Solutions if you have any concerns about the appraisal procedure.

Myth: Assessed value should always equate to market value.

Fact: While most states uphold the idea that assessed value approximates estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.

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

Fact: The price of the home does not affect the salary of the appraiser; because of this, the appraiser has no preconceived interest in the opinion of value of the property. What this means is he will conduct services with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Market value should be the same as replacement cost.

Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a house without being under influence from any outside group to purchase or sell. Replacement cost is the dollar amount necessary to reconstruct a house in-kind.

Myth: Certain formulae, like the price per square foot, are what appraisers use to determine the cost of a property.

Fact: Appraisers make a detailed analysis of all factors in consideration to the worth of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.

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

Fact: Worth appreciation of a specific property must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the house itself. This is true in good economic times as well as poor.

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

Fact: To determine an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from just viewing the home from the exterior.

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

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, consumers have to be supplied with a copy of the report upon written request, through the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even concern themselves with what the appraisal contains so long as their lending company is fine with the contents therein.

Fact: It is a very good idea for consumers to read a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing an exorbitant amount of data - 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 proximity.