Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed purchases. You are also entitled by law to request a copy of the completed report from your lender. Contact Shamrock Appraisals, Inc. if you have any concerns about the appraisal process.

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

Fact: It is possible that Alabama, like most states, validates the common myth that the assessed value is the same as the market value; however, this is not often the case. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby homes are exact examples of why this occurs.

Myth: Depending on whether the appraisal is done for the buyer or the seller, the cost of the property will vary.

Fact: The cost of the home does not affect the payment of the appraiser; as a result, the appraiser has no vested interest in the cost of the property. Obviously, he will complete his job with impartiality and objectivity regardless for whom the appraisal is conducted.

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

Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any external party to purchase or sell. If the home were reconstructed, the dollar amount required to do so would be the replacement cost.

Myth: There are certain methods that appraisers use to show the cost of a house, like the price per square foot.

Fact: An appraisal report is an assertion of information concluded from the home's size, location, proximity to specific facilities, the condition of the house and the value of recent comparable sales. You can count on Shamrock Appraisals, Inc.'s staff to be ethical in assessing this information.

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

Fact: All increase of price is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable houses. It doesn't matter if the economy is doing well or declining.

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

Fact: There are a number of different factors that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data required.

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

Fact: Legally, the report is owned by the lending company unless the lender releases their interest in the document. Home buyers have to be provided with a version of the document upon written request due to the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their appraisal so long as it exceeds the necessities of their lending company.

Fact: It is a very good idea for home buyers to look at a copy of their appraisal so that they can double-check the accuracy of the report, in case they 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 data 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 proximity.

Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending agency.

Fact: Depending upon their qualifications and designations, appraisers can and often do perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: There's no reason to get an appraisal if you order a home inspection.

Fact: Appraisal reports are definitely not the same as a home inspection report. The appraiser forms an opinion of value in the appraisal process and resulting report. House inspectors will compose a report that will show the condition of the house and its major components and possible damage.