Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to create legitimate appraisal reports for federally-related sales. You have the ability to demand a copy of the completed appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.

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

Fact: While most states back the idea that assessed value equates estimated market value, this commonly is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are exact examples of why the price can vary.

Myth: The buyer or the seller sometimes may have leverage in the value of the home depending upon for whom the appraiser is working.

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

Myth: Market value will be the same as replacement cost.

Fact: Without any suggestion from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement cost is the dollar amount necessary to rebuild a house in-kind.

Myth: Appraisers use a calculation, such as a specific price per square foot, to figure out the worth of a house.

Fact: An appraisal is an assertion of data concluded from the house's size, location, proximity to specific facilities, the condition of the home and the price of recent comparable sales. You can rely on REID E. CHOATE & ASSOCIATES, LLC's staff to be honest in assessing this information.

Myth: In a strong economy - when the worth of houses in a given county are found to be rising by a particular percentage - the prices of individual houses in the vicinity can be expected to appreciate by that same percentage.

Fact: Any worth at which an appraiser concludes in regards to a particular home is always individualized, based on certain factors pulled from the information of comparable properties and other considerations within the house itself. It doesn't matter if the economy is doing well or declining.

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Myth: You can often see what a home is worth simply by looking at the exterior.

Fact: There are a number of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data necessary.

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

Fact: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the document. However, home buyers have to be supplied with a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their document so long as it satisfies the requirements of their lending group.

Fact: Only if consumers examine a copy of their appraisal report can they verify 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 an invaluable record for future reference, containing useful and often-revealing 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.

Myth: Appraisers are hired only to assess home values in property sales involving mortgage-lending transactions.

Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: There's no reason to get an appraisal if you get a home inspection.

Fact: Appraisal reports are definitely not the same as a home inspection report. An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. House inspectors will compose a report that will determine the condition of the home and its major components and possible damage.