Appraisal myths debunked

It is enforced by law that an appraiser is required to be state-licensed to offer appraisal reports for federally-supported property transactions in Alabama. The law allows you to get a copy of your finished appraisal report from your lender after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value should equate to market value.

Fact: While most states back the idea that assessed value equates estimated market value, this usually is not the case. Sometimes when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for quite some time, it may vary wildly.

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

Fact: The appraiser has no vested interest in the result of the appraisal report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value should equal replacement cost.

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

Myth: There are specific methods that real estate appraisers use to find the opinion of value of a house, like the price per square foot.

Fact: Appraisers make a detailed analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: As houses increase their worth by a certain percentage - in a strong economic state - the houses in proximity are expected to appreciate by the same amount.

Fact: All increase of value is on an individual basis, determined by data on relevant conditions and the data of comparable houses. This is true in fair economic times as well as poor.

Have other questions about appraisers, appraising or real estate in Tuscaloosa County or Tuscaloosa, AL?

Contact our professional staff

Myth: You can often find what a property is worth simply by looking at the outside.

Fact: There are a multitude of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived just by inspecting the home from the outside.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance real estate, you own the ordered appraisal report.

Fact: Legally, the document is owned by the lending agency unless the lender relinquishes their interest in the report. Home buyers must be given a copy of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal report so long as it satisfies the requirements of their lending company.

Fact: It is very important for consumers to peruse a copy of their 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. Also, the appraisal makes a near perfect record for future reference, comprised of useful and often-revealing information - including 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.

Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender sales transaction.

Fact: Based upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: A property inspection serves the same purpose as an appraisal.

Fact: An appraisal does not serve the same purpose as an inspection report. An appraiser concludes on an opinion of value in the appraisal process and resulting report. House inspectors will write a report that will express the condition of the house and its major components and possible damage.