Appraisal myths debunked

It is required by law that a real estate appraiser must be state-licensed to write appraisals for federally-supported home transactions in Indiana. You have the ability to receive a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

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

Fact: It is possible that Indiana, like most states, validates the idea that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Usually when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: The appraised value of a house will vary depending upon if the appraisal is produced for the buyer or the seller.

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

Myth: Any time market value is found, it should be similar to the replacement cost of the property.

Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house. If the home were rebuilt, the dollar amount needed to do so would make up the replacement cost.

Myth: Specific methods, like the price per square foot, are what appraisers use to come to the value of a house.

Fact: An appraisal report is an assertion of information based on the house's size, location, proximity to undesirable facilities, the condition of the home and the price of recent comparable sales. You can depend on Tim Norris & Associates's appraisers to be professional in assessing this data.

Myth: In a strong economy - when the values of properties in a given neighborhood are reported to be appreciating by a particular percentage - the prices of individual properties in the vicinity can be expected to increase by that same percentage.

Fact: Price increase of a certain property is always determined on a case-by-case basis, factoring in data on comparable properties and other relevant elements. It doesn't matter if the economy is on the rise or declining.

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

Fact: There are a multitude of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data required.

Myth: Considering that the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal report. However, home buyers must be given a copy of the document upon written request, due to the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal document so long as it satisfies the requirements of their lending agency.

Fact: Only if consumers examine a copy of their appraisal report 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. There is a great deal of data stored in an appraisal that can be useful to the consumer in the future, such as 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.