Appraisal myths debunked

Legally, a real estate appraiser must be state certified to write legitimate real estate appraisals for federally-related transactions. Also by law, you are allowed to request a copy of the finished appraisal from your lending agency. Contact Crest Appraisal Services if you have any concerns about the appraisal process.

Myth: The value that is ascertained by the appraiser should be exactly the same as the market value.

Fact: While most states back the idea that assessed value is equal to estimated market value, this generally is not the case. There are times when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the area have not been reassessed for a good length of time, it may vary wildly.

Myth: The buyer or the seller can have some pull in the cost of the home depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the result of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

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

Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under undue influence to buy or sell. The dollar amount demanded to rebuild a property is what constitutes the replacement cost.

Myth: Certain methods, such as the price per square foot, are the ways appraisers use to come to the value of a house.

Fact: There are many different ways that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable houses.

Myth: As properties increase their worth by a certain percentage - in a strong economy - the houses around the appreciating properties are figured to increase by the same amount.

Fact: Any value at which an appraiser concludes in regards to a particular house is always individualized, based on certain factors derived from the data of comparable homes and other specifications within the home itself. It makes no difference if the economy is powerful or poor.

Myth: Just looking at what the home looks like on its exterior gives a good idea of its worth.

Fact: To determine an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. An external inspection certainly can't provide all of the information necessary.

Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their property, they own their appraisal.

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

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the necessities of their lender.

Fact: A consumer should definitely read through their appraisal report; there will probably be some questions or some concerns with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, comprised of 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.