Appraisal myths debunked

Legally, an appraiser is required to be state certified to produce legitimate real estate appraisals for federally-related sales. Also by law, you have the ability to demand a copy of the finished appraisal from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.

Fact: It might be that Alabama, like most states, validates the common myth that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended period.

Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the opinion of value of the property will vary.

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

Myth: Market value should equate to replacement cost.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a house without being under influence from any external group to buy or sell. If the home were reconstructed, the dollar amount necessary to do so would make up the replacement cost.

Myth: There are specific methods that real estate appraisers use to determine the cost of a home, such as the price per square foot.

Fact: An appraisal report is an amalgamation of information concluded from the property's size, location, proximity to certain facilities, the condition of the home and the cost of recent comparable sales. You can rely on Hardy Appraisal Service's appraisers to be ethical in assessing this data.

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

Fact: Value appreciation of a certain property must be concluded on an individualized basis, factoring in data on comparable properties and other relevant considerations. It makes no difference if the economy is excellent or bad.

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

Fact: To find an accurate value 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 real way to get all of this data from just viewing the house from the outside.

Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance real estate, you own the ordered appraisal report.

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be given it by their lending company.

Myth: Home buyers need not worry about what is in their report so long as it satisfies the requirements of their lending company.

Fact: Only if home buyers check out a copy of their appraisal can they double-check 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 report makes a near perfect record for future reference, containing useful and often-revealing data - 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 area.