Appraisal myths debunked

By law, an appraiser must be state-licensed to produce appraisals for federally-backed transactions. The law gives you the right to receive a copy of your completed appraisal report from your lending agency after it has been provided. Contact us if you have any questions about the appraisal process.

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

Fact: While most states support the concept that assessed value equates estimated market value, this generally is not the case. At times when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the area have not been reassessed for a good length of time, it may vary wildly.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the cost of the home will vary.

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

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

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell. Replacement cost is the dollar amount required to reconstruct a house in-kind.

Myth: Specific methods, like the price per square foot, are the methods appraisers use to arrive at the value of a home.

Fact: There are many varied calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable homes.

Myth: In a strong economy - when the values of houses in a given county are found to be rising by a certain percentage - the prices of individual houses in the area can be expected to increase by that same percentage.

Fact: Price appreciation of a certain house is always determined on a case-by-case basis, factoring in data on comparable houses and other relevant elements. It makes no difference if the economy is good or terrible.

Have other questions about appraisers, appraising or real estate in Tuscaloosa County or Tuscaloosa, AL?

Contact our professional staff

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

Fact: To determine an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these things can be derived just by examining the home from the exterior.

Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance real estate, you own the provided appraisal report.

Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the document. Home buyers must be provided with a copy of the report upon written request as per the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the necessities of their lending agency.

Fact: It is very important for consumers to go through a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal that will probably 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.

Myth: Appraisers are hired only to assess house values in property sales involving mortgage-lending deals.

Fact: Based upon their qualifications and designations, appraisers can and will provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: You don't need to get an appraisal if you have had a home inspection.

Fact: An appraisal report does not serve the same purpose as an inspection report. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the home and its main components and reports their findings.