Appraisal myths & facts

Legally, a real estate appraiser has to be state certified to perform legitimate appraisal reports for federally-backed transactions. You are also entitled by law to request a copy of the completed report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser will be the same as the market value.

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

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

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

Myth: Market value should approximate replacement cost.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under undue influence to buy or sell. Replacement cost is the dollar amount needed to reconstruct a property in-kind.

Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the value of a house.

Fact: An appraisal is an amalgamation of information based on the home's size, location, proximity to undesirable facilities, the condition of the house and the cost of recent comparable sales. You can count on Astute Appraisals, Inc.'s staff to be forthright in assessing this data.

Myth: When the economy is on the rise and the sales prices of houses are found to be appreciating by a certain percentage, the other properties in the neighborhood can be expected to rise based on that same percentage.

Fact: All appreciation of worth is on an individual basis, found by data on relevant elements and the data of comparable properties. It doesn't matter if the economy is doing well or declining.

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

Fact: Property worth is determined by a number of variables, including area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply inspecting the house from the exterior.

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

Fact: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. However, home buyers must be given a copy of the report upon written request, due to the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lending agency.

Fact: Only if consumers check out a copy of their report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an 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 proximity.