Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-supported purchases. The law entitles you to acquire a copy of your completed report from your lender after it has been provided. Contact Appraisal Associates if you have any questions about the appraisal process.

Myth: Assessed value generally will be similar to to market value.

Fact: It might be that Alabama, like most states, validates the suggestion that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are excellent examples of why the price can vary.

Myth: The value of a home will vary depending upon if the appraisal is provided for the buyer or the seller.

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

Myth: Market value should equate to replacement cost.

Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under pressure to buy or sell. The dollar amount required to rebuild a property is what constitutes the replacement cost.

Myth: Appraisers use a formula, like a specific price per square foot, to arrive at the value of a property.

Fact: Appraisers complete a detailed analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.

Myth: When the economy is on the rise and the cost of homes are reported to be appreciating by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.

Fact: Any price at which an appraiser arrives concerning a certain home is always individualized, based on certain factors pulled from the data of comparable properties and other considerations within the house itself. This is true in good economic times as well as poor.

Myth: You can often tell what a house is worth simply by looking at the exterior.

Fact: House worth is determined by a number of factors, including location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by inspecting the home from the outside.

Myth: Considering that the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. However, consumers must be given a copy of the document upon written request, through the Equal Credit Opportunity Act.

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

Fact: Only if consumers examine a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, comprised of useful and often-revealing information - including, but 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 area.