Appraisal myths & facts

Legally, an appraiser needs to be state certified to produce substantiated real estate appraisals for federally-supported purchase. Also by law, you are allowed to request a copy of the finished appraisal from your lender. Contact Tim Norris & Associates if you have any concerns about the appraisal procedure.

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

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

Myth: The buyer or the seller often will have an influence in the value of the home depending upon for whom the appraiser is working.

Fact: The appraised value of the home does not affect the payment of the appraiser; due to this, the appraiser has no pressured interest in the value of the property. This means that he will provide services with impartiality and independence regardless for whom the appraisal is produced.

Myth: The replacement value of the house will be is on par with the market value.

Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a property without being under duress from any outside party to buy or sell. The dollar amount necessary to rebuild a home is what constitutes the replacement cost.

Myth: Appraisers use a formula, such as a certain price per square foot, to come to the value of a home.

Fact: An appraisal report is a collection of information concluded from the home's size, location, proximity to undesirable facilities, the condition of the property and the value of recent comparable sales. You can rely on Tim Norris & Associates's appraisers to be ethical in assessing this information.

Myth: When the economy is doing well and the sales prices of houses are reported to be rising by a certain percentage, the other properties in the area can be expected to increase based on that same percentage.

Fact: Value appreciation of a certain house must be concluded on an individualized basis, factoring in data on comparable houses and other relevant specifications within the house itself. It doesn't matter if the economy is on the rise or declining.

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

Fact: Property worth is determined by a number of variables, including location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information required.

Myth: Because consumers pay for appraisals when applying for loans to buy or refinance real estate, they own their appraisal.

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. Consumers have to be given a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even concern themselves with what the appraisal report contains so long as their lending agency is fine with the contents therein.

Fact: It is very important for home buyers to go through a copy of their appraisal report so that they can double-check the accuracy of the report, 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 report makes a valuable record for future reference, comprised of 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.