Appraisal myths & facts

It is required by the government that an appraiser needs to be state-licensed to produce appraisals for federally-supported real estate transactions in Alabama. Also by law, you have the right to receive a copy of the finished appraisal from your lender. Contact us if you have any concerns about the appraisal process.

Myth: Market value will be similar to the assessed value of the property.

Fact: It might be that Alabama, like most states, supports the idea that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. Often when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the area have not been reassessed for quite a while, it may vary wildly.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the house will vary.

Fact: The appraised value of the property does not affect the pay of the appraiser; as such, the appraiser has no preconceived interest in the worth of the property. Obviously, he will provide job with impartiality and objectivity regardless for whom the appraisal is created.

Myth: Market value will be the same as replacement cost.

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell. The dollar amount needed to rebuild a house is what forms the replacement cost.

Myth: There are specific ways that appraisers use to find the opinion of value of a house, such as the price per square foot.

Fact: An appraisal report is a collection of data based on the house's size, location, proximity to some facilities, the condition of the property and the cost of recent comparable sales. You can depend on Shamrock Appraisals, Inc.'s appraisers to be honest in assessing this information.

Myth: When the economy is robust and the value of homes are reported to be increasing by a certain percentage, the other properties in the vicinity can be expected to rise based on that same percentage.

Fact: Any value at which an appraiser arrives in regards to a certain property is always individualized, based on certain factors derived from the data of comparable houses and other considerations within the home itself. This is true in excellent economic times as well as bad.

Myth: The property's outside is determinate of the actual worth of the home; there is no need to do an interior appraisal.

Fact: To determine an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found simply by inspecting the property from the exterior.

Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance your house, you own the ordered appraisal.

Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the document. Consumers must be supplied with a copy of the report upon written request due to the Equal Credit Opportunity Act.

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

Fact: Only if home buyers check out a copy of their report 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. There is a wealth of data contained in an appraisal 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 area.