Appraisal myths debunked

Legally, an appraiser must be state certified to perform substantiated appraisal reports for federally-backed sales. The law entitles you to get a copy of your completed appraisal from your lender after it has been produced. Contact McCarthy Real Estate, Inc., Appraisal Services if you have any questions about the appraisal process.

Myth: Market value will always be equivocal to the assessed value of the property.

Fact: While most states support the suggestion that assessed value is the same as estimated market value, this usually is not the case. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are perfect examples of why this occurs.

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

Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.

Myth: Any time market value is established, it should be the same as the replacement cost of the house.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under duress to buy or sell. Replacement value is the dollar amount needed to rebuild a property in-kind.

Myth: There are specific ways that real estate appraisers use to find the cost of a property, such as the price per square foot.

Fact: Appraisers make a full analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: In a powerful economy - when the sales prices of properties in a given county are reported to be appreciating by a certain percentage - the values of individual houses in the vicinity can be expected to appreciate by that same percentage.

Fact: Value appreciation of a specific house must be determined on a case-by-case basis, factoring in information on comparable houses and other relevant considerations. It makes no difference whether the economy is robust or on the decline.

Myth: The house's outside is determinate of the actual worth of the home; there is no need to do an interior appraisal.

Fact: Home worth is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by inspecting the house from the outside.

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

Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. By the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be given it by their lender.

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

Fact: Only if home buyers examine a copy of their appraisal 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 information contained in an appraisal that should 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.