Appraisal myths debunked

By law, an appraiser is required to be state-licensed to offer appraisals for federally-supported sales. Also by law, you have the ability to demand a copy of the finished appraisal report from your lending agency. Contact Randolph Appraisals, Inc. if you have any concerns about the appraisal process.

Myth: The value that is ascertained by the tax assessor should be the same as the 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 reconstruction has occurred and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged period.

Myth: The buyer or the seller sometimes may have some pull in the cost of the home depending upon for whom the appraiser is working.

Fact: There is no personal interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is written.

Myth: Market value should equate to replacement cost.

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. The dollar amount required to rebuild a house is what shows the replacement cost.

Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the value of a home.

Fact: Appraisers complete a full analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: In a powerful economy - when the values of properties in a given area are reported to be appreciating by a particular percentage - the worth of individual properties in the area can be expected to rise by that same percentage.

Fact: Any worth at which an appraiser arrives concerning a specific house is always personalized, based on certain factors concluded from the data of comparable properties and other specifications within the property itself. It makes no difference if the economy is robust or on the decline.

Myth: Just looking at what the house looks like on the outside gives an idea of its value.

Fact: Home value is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply looking at the property from the exterior.

Myth: Since the consumer is the one who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal. However, home buyers have to be given a copy of the report upon written request, because of the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even worry about what the appraisal contains so long as their lender is satisfied.

Fact: A consumer should definitely read through their appraisal; there could be some questions or some worries about the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an 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 region.