Common myths about appraising

Legally, an appraiser needs to be state certified to perform substantiated appraisal reports for federally-supported sales. Also by law, you have the right to demand a copy of the finished report from your lender. Contact Hardy Appraisal Service if you have any questions about the appraisal procedure.

Myth: Assessed value should be the same as to market value.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended period.

Myth: The value of a property will differ depending upon if the appraisal is ordered for the buyer or the seller.

Fact: The cost of the property does not affect the salary of the appraiser; because of this, the appraiser has no personal interest in the opinion of value of the property. Obviously, he will conduct services with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: The replacement value of the property should be is on par with the market value.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under pressure to buy or sell. The dollar amount necessary to rebuild a property is what shows the replacement cost.

Myth: Certain formulae, such as the price per square foot of the property, are the ways appraisers use to determine the value of a home.

Fact: There are many differing formulae that an appraiser will use to make a comprehensive analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable homes.

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

Fact: Any price at which an appraiser concludes in regards to a particular property is always personalized, based on certain factors found from the information of comparable homes and other considerations within the house itself. This is true in fair economic times as well as bad.

Myth: You can commonly see what a house is worth simply by looking at the outside.

Fact: To find an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. As you can see, none of these factors can be found just by looking at the home from the exterior.

Myth: Considering that the consumer is the one who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

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

Myth: Home buyers need not care about what is in their report so long as it exceeds the necessities of their lending group.

Fact: It is very important for home buyers to peruse a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, containing helpful 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 vicinity.