Appraisal myths & facts

Legally, an appraiser needs to be state certified to perform legitimate real estate appraisals for federally-related purchase. The law allows you to acquire a copy of your finished appraisal report from your lender after it has been produced. Contact Tight & Right Real Estate Valuation if you have any questions about the appraisal procedure.

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

Fact: While most states uphold the idea that assessed value equates estimated market value, this often is not the case. Usually when interior remodeling has been done and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: The opinion of value of a house will differ 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 appraisal and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

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

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a property without being under influence from any outside group to buy or sell. The dollar amount necessary to rebuild a house is what constitutes the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to conclude the cost of a property.

Fact: An appraisal report is an amalgamation of data concluded from the house's size, location, proximity to some facilities, the condition of the house and the worth of recent comparable sales. You can rely on Tight & Right Real Estate Valuation's appraisers to be ethical in assessing this information.

Myth: In a robust economy - when the values of homes in a given neighborhood are found to be appreciating by a particular percentage - the prices of individual houses in the area can be expected to increase by that same percentage.

Fact: Any price at which an appraiser concludes in regards to a certain property is always personalized, based on certain factors derived from the data of comparable homes and other considerations within the property itself. It doesn't matter if the economy is on the rise or declining.

Myth: Just seeing what the home looks like on its exterior gives a good idea of its cost.

Fact: Property worth is determined by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information necessary.

Myth: Since you're the one paying for the appraisal when applying for the loan to buy or refinance your house, you own the produced appraisal.

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be given one by their lending agency.

Myth: It doesn't matter to consumers what's in the report so long as it meets the needs of their lending company.

Fact: A home buyer should definitely read through their document; there may be some questions or some worries about the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing a great deal 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.