Common myths about appraising

Legally, a real estate appraiser needs to be state certified to perform legitimate appraisal reports for federally-related transactions. Also by law, you have the ability to request a copy of the finished appraisal report from your lender. Contact Astute Appraisals, Inc. if you have any questions about the appraisal process.

Myth: Assessed value will always be the same as to 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 not aware of and a lack of reassessment on nearby properties are excellent examples of why there might be a differential in price.

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

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

Myth: Market value should approximate replacement cost.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific home, with neither being under undue influence to buy or sell. If the property were reconstructed, the dollar amount necessary to do so would form the replacement cost.

Myth: Appraisers use a formula, like a specific price per square foot, to arrive at the cost of a home.

Fact: An appraisal report is a collection of data based on the home's size, location, proximity to specific facilities, the condition of the home and the value of recent comparable sales. You can count on Astute Appraisals, Inc.'s staff to be forthright in assessing this data.

Myth: As properties appreciate by a specific percentage - in a strong economic state - the homes around the appreciating properties are expected to increase by the same amount.

Fact: Worth increase of a certain home has to be determined on an individualized basis, factoring in information on comparable houses and other relevant specifications within the property itself. It makes no difference if the economy is strong or bad.

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Myth: Just examining what the home looks like on the outside gives an idea of its cost.

Fact: To determine an accurate worth beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no possible way to get all of this information from simply looking at the property from the exterior.

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

Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the document. Home buyers must be provided with a version of the report upon written request due to the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the needs of their lending agency.

Fact: A consumer should definitely look through their document; there will probably be some questions or some concerns with the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an appraisal report 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 area.

Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the cost of a property during a sales transaction involving a lender.

Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: An appraisal report is the same as a home inspection.

Fact: Appraisal reports are completely different than a home inspection. The job of the appraiser is to form an opinion of value in the appraisal process and through writing the report. House inspectors will compose a report that will express the condition of the property and its major components and possible damage.