Appraisal myths debunked

Legally, an appraiser must be state certified to perform substantiated real estate appraisals for federally-supported purchase. Also by law, you have the right to request a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal procedure.

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

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are excellent examples of why this occurs.

Myth: Depending on whether the appraisal is produced for the buyer or the seller, the cost of the property will vary.

Fact: The appraiser has no vested interest in the outcome of the report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: The replacement cost of the property should be is on par with the market value.

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under undue influence to buy or sell. The dollar amount needed to rebuild a home is what constitutes the replacement cost.

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

Fact: An appraisal is an amalgamation of information based on the house's size, location, proximity to certain facilities, the condition of the house and the cost of recent comparable sales. You can rely on Graham Appraisal's appraisers to be forthright in assessing this data.

Myth: In a strong economy - when the costs of properties in a given region are reported to be rising by a particular percentage - the worth of individual properties in the proximity can be expected to appreciate by that same percentage.

Fact: Any cost at which an appraiser concludes in regards to a particular property is always personalized, based on certain factors derived from the data of comparable homes and other considerations within the house itself. It makes no difference if the economy is powerful or terrible.

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Myth: You can generally tell what a property is worth simply by looking at the exterior.

Fact: To find an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just inspecting the home from the outside.

Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their property, they legally own their appraisal.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. Home buyers must be provided with a version of the appraisal 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 needs of their lender.

Fact: It is very important for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the report, in case it's required to question its accuracy. 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 consumer 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 region.

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

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

Myth: A property inspection serves the same purpose as an appraisal.

Fact: An appraisal does not serve the same purpose as an inspection. The job of the appraiser is to find an opinion of value in the appraisal process and through writing the report. The task of a home inspector is to approximate the condition of the house and its major components, then write a report on these findings.