Common myths about appraising

Legally, a real estate appraiser is required to be state certified to perform legitimate appraisal reports for federally-backed transactions. Also by law, you have the right to request a copy of the finished appraisal from your lending agency. Contact us if you have any questions about the appraisal procedure.

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

Fact: While most states uphold the suggestion that assessed value approximates estimated market value, this generally is not the case. There are times when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the area have not been reassessed for quite some time, it may vary wildly.

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

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

Myth: Market value will equate to replacement cost.

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific home, with neither being under duress to buy or sell. The dollar amount required to rebuild a house is what forms the replacement cost.

Myth: Certain methods, such as the price per square foot, are the ways appraisers use to arrive at the value of a house.

Fact: An appraisal is a collection of data concluded from the home's size, location, proximity to certain facilities, the condition of the home and the cost of recent comparable sales. You can count on Ralph Real Estate Appraisal, Inc.'s appraisers to be honest in assessing this information.

Myth: When the economy is strong and the value of houses are reported to be rising by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.

Fact: Any worth at which an appraiser concludes concerning a certain property is always personalized, based on certain factors concluded from the data of comparable houses and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.

Myth: The property's exterior is determinate of the actual value of the property; there is no need to do an interior inspection.

Fact: Home worth is determined by a number of factors, including location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data required.

Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your house, you own the produced appraisal.

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

Myth: Home buyers need not be concerned with what is in their report so long as it satisfies the needs of their lending company.

Fact: A home buyer should definitely look through their appraisal; there could be some questions or some worries about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing an incredible amount of information - including, but not limited to 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 vicinity.