Common myths about appraising

By law, an appraiser must be state-licensed to perform appraisals for federally-supported purchases. The law allows you to get a copy of your completed appraisal from your lender after it has been provided. Contact All City Appraisal if you have any questions about the appraisal process.

Myth: Assessed value generally will be similar to to market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are perfect examples of why there might be a differential in price.

Myth: The appraised value of a home will be different depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: There is no vested interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is written.

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

Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property. If the home were rebuilt, the dollar amount required to do so would set the replacement cost.

Myth: There are specific ways that appraisers use to find the opinion of value of a house, like the price per square foot.

Fact: Appraisers complete a full analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: In a strong economy - when the values of houses in a given neighborhood are reported to be increasing by a certain percentage - the worth of individual homes in the area can be expected to increase by that same percentage.

Fact: Any price at which an appraiser concludes concerning a particular home is always personalized, based on certain factors found from the data of comparable houses and other specifications within the home itself. This is true in good economic times as well as bad.

Myth: Just examining what the house looks like on its exterior gives a good idea of its value.

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from simply examining the house from the exterior.

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

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. Home buyers must be provided with a version of the report upon written request because of the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their appraisal document so long as it satisfies the requirements of their lending group.

Fact: Only if consumers examine 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. Also, the appraisal report makes a near perfect record for future reference, comprised of helpful and often-revealing information - including 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.