Common myths about appraising

By law, an appraiser must be state-licensed to offer appraisals for federally-backed sales. Also by law, you have the ability to demand a copy of the finished appraisal from your lending agency. Contact Shamrock Appraisals, Inc. if you have any concerns about the appraisal procedure.

Myth: The value that is ascertained by the appraiser should be exactly the same as the market value.

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

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

Fact: The value of the home does not affect the salary of the appraiser; because of this, the appraiser has no preconceived interest in the worth of the property. What this means is he will conduct business with impartiality and independence regardless for whom the appraisal is produced.

Myth: Market value will be the same as replacement cost.

Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. If the home were reconstructed, the dollar amount required to do so would set the replacement cost.

Myth: Specific methods, such as the price per square foot of the property, are what appraisers use to ascertain the cost of a house.

Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.

Myth: In a powerful economy - when the sales prices of homes in a given neighborhood are reported to be increasing by a particular percentage - the values of individual properties in the proximity can be expected to appreciate by that same percentage.

Fact: Worth appreciation of a specific home is always concluded on a case-by-case basis, factoring in information on comparable homes and other relevant elements. It doesn't matter if the economy is on the rise or declining.

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

Fact: There are a multitude of different variables that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the house from the exterior.

Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance their property, they own their appraisal report.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers must be provided with a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.

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

Fact: It is almost imperative for home buyers to look at a copy of their appraisal report so that they can double-check the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, as it contains an incredible amount of information - including, but certainly not limited to 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.