Common myths about appraising

Legally, an appraiser has to be state certified to create legitimate real estate appraisals for federally-supported transactions. You have the ability to request a copy of the finished appraisal report from your lending agency. Contact High Touch Appraisal Service if you have any concerns about the appraisal process.

Myth: Market value has to 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. Generally when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.

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

Fact: The appraiser has no personal interest in the result of the appraisal and should complete 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 derived from what a willing buyer would likely pay a willing seller for a specific house, with neither being under duress to buy or sell. Replacement cost is the dollar amount necessary to rebuild a house in-kind.

Myth: There are certain methods that appraisers use to find the cost of a home, such as the price per square foot.

Fact: There are many varied processes that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable properties.

Myth: In a robust economy - when the prices of properties in a given neighborhood are reported to be rising by a particular percentage - the costs of individual homes in the proximity can be expected to increase by that same percentage.

Fact: Any worth at which an appraiser concludes concerning a particular house is always personalized, based on certain factors pulled from the data of comparable houses and other specifications within the property itself. This is true in excellent economic times as well as poor.

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

Fact: There are a number of different factors that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just inspecting the house from the outside.

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

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with it by their lending agency.

Myth: There's no point for consumers to even care about what the appraisal report contains so long as their lending company is fine with the contents therein.

Fact: It is very important for home buyers to look at a copy of their appraisal report so that they can verify the accuracy of the document, in case they need to question its veracity. 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 appraisal that can 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 vicinity.