Appraisal myths & facts
Legally, a real estate appraiser needs to be state certified to perform substantiated appraisal reports for federally-backed sales. Also by law, you are entitled to demand a copy of the completed appraisal report from your lending agency. Contact us if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be exactly the same as the market value.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an extended time.
Myth: The appraised value of a property will change depending upon if the appraisal is produced for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: The replacement value of the house should be is on par with the market value.
Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. Replacement cost is the dollar amount required to rebuild a property in-kind.
Myth: There are certain ways that appraisers use to show the opinion of value of a property, like the price per square foot.
Fact: Appraisers complete a full analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent costs of comparable houses.
Myth: As houses increase their worth by a certain percentage - in a strong economic state - the homes nearby are figured to increase by the same amount.
Fact: Value appreciation of a certain house has to be determined on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Tuscaloosa County or Tuscaloosa, AL?Contact us
Myth: You can generally tell what a home is worth simply by looking at the outside.
Fact: To determine an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. An outside-only inspection obviously can't provide all of the data required.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance your house, you own the ordered appraisal report.
Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. Consumers must be supplied with a copy of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it meets the requirements of their lender.
Fact: It is almost imperative for home buyers to read a copy of their report so that they can verify the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal 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 vicinity.
Myth: The only reason someone would order an appraisal is if a house needs its worth assessed in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: Appraisal reports are nothing like a home inspection report. The appraiser decides upon an opinion of value in the appraisal process and resulting document. A home inspector determines the condition of the property and its major components and reports these findings.