Common myths about appraising

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related purchases. You are also entitled by law to acquire a copy of the finished report from your lender. Contact us if you have any questions about the appraisal procedure.

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

Fact: It is probable that Kentucky, like most states, validates the suggestion that the assessed value equates to the market value; however, this is not always true. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are exact examples of why there might be a differential in price.

Myth: The value of a home will be different depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The opinion of value of the house does not affect the payment of the appraiser; because of this, the appraiser has no preconceived interest in the opinion of value of the home. This means that he will complete his services with impartiality and objectivity regardless for whom the appraisal is created.

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

Fact: Without any suggestion from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. The dollar amount necessary to reconstruct a property is what forms the replacement cost.

Myth: There are certain ways that appraisers use to determine the value of a house, such as the price per square foot.

Fact: An appraisal report is a collection of data concluded from the home's size, location, proximity to certain facilities, the condition of the property and the cost of recent comparable sales. You can depend on Graham Appraisal's staff to be forthright in assessing this information.

Myth: When the economy is doing well and the sales prices of houses are found to be rising by a certain percentage, the other homes in the proximity can be expected to appreciate based on that same percentage.

Fact: Any value at which an appraiser arrives in regards to a particular home is always personalized, based on certain factors derived from the data of comparable properties and other specifications within the home itself. This is true in strong economic times as well as poor.

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Myth: The property's exterior is determinate of the actual value of the property; it is unnecessary to do an interior inspection.

Fact: House value is determined by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived just by viewing the property from the exterior.

Myth: Since the consumer is the person 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: Legally, the report is owned by the lending company unless the lender relinquishes their interest in the report. Because of the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be given one by their lender.

Myth: There's no point for home buyers to even worry about what the appraisal report contains so long as their lending institution is fine with the contents therein.

Fact: A consumer should definitely look through their document; there may be some questions or some concerns about the accuracy of the appraisal 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 data stored in an appraisal that should 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 proximity.

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

Fact: Based upon their qualifications and designations, appraisers can and may perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: You shouldn't need to get an appraisal if you order a home inspection.

Fact: A home inspection report serves a completely different purpose than an appraisal report. An appraiser decides upon an opinion of value in the appraisal process and resulting report. House inspectors will produce a report that will express the condition of the property and its major components and possible damage.