Common myths about appraising

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related sales. You have the ability to request a copy of the finished appraisal from your lender. Contact Mason's Appraisal Service if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser should be equivalent to the market value.

Fact: While most states back the concept that assessed value approximates estimated market value, this generally is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are excellent examples of why the price can vary.

Myth: Depending on whether the appraisal is written for the buyer or the seller, the value of the home will vary.

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

Myth: Market value should approximate replacement cost.

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 pressure from any outside party to buy or sell. If the home were reconstructed, the dollar amount necessary to do so would set the replacement cost.

Myth: Certain formulae, such as the price per square foot of the property, are the ways appraisers use to arrive at the cost of a house.

Fact: There are many numerous formulae that an appraiser will use to make a full investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable homes.

Myth: In a powerful economy - when the costs of properties in a given county are found to be appreciating by a particular percentage - the worth of individual homes in the vicinity can be expected to rise by that same percentage.

Fact: Cost increase of a specific house must be concluded on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. This is true in excellent economic times as well as bad.

Myth: The house's exterior is determinate of the actual value of the property; it is unnecessary to do an interior inspection.

Fact: There are a number of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply inspecting the home from the exterior.

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

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. Home buyers must be given a copy of the appraisal report through request as per the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their report so long as it satisfies the needs of their lending institution.

Fact: It is almost imperative for consumers to peruse a copy of their appraisal so that they can verify the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an report that can be useful to the home buyer 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.