Appraisal myths debunked

Legally, an appraiser must be state certified to create substantiated appraisal reports for federally-related sales. Also by law, you have the ability to receive a copy of the completed report from your lending agency. Contact us if you have any questions about the appraisal procedure.

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

Fact: It could 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. Often when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the neighborhood have not been reassessed for years or more, it may vary wildly.

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

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

Myth: Any time market value is established, it should equal the replacement cost of the property.

Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under pressure from any outside group to buy or sell. Replacement cost is the dollar amount needed to rebuild a home in-kind.

Myth: There are specific ways that real estate appraisers use to show the opinion of value of a home, such as the price per square foot.

Fact: There are many differing processes that an appraiser will use to make a full analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable properties.

Myth: As houses increase their worth by a certain percentage - in a robust economy - the properties around the appreciating properties are figured to increase by the same amount.

Fact: Worth appreciation of a specific house must be determined on an individualized basis, factoring in information on comparable properties and other relevant elements. It makes no difference whether the economy is robust or terrible.

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

Fact: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by examining the home from the outside.

Myth: Considering that the consumer is the one who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Consumers have to be supplied with a copy of the appraisal report upon written request as per the Equal Credit Opportunity Act.

Myth: There's no need for home buyers to even care about what the report contains so long as their lender is fine with the contents therein.

Fact: Only if consumers look over a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, containing an exorbitant amount 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 proximity.