Common myths about appraising

Legally, an appraiser is required to be state certified to write legitimate appraisal reports for federally-supported sales. You have the ability to demand a copy of the finished appraisal from your lending agency. Contact Crawford Romans Appraisal Services if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser should be the same as the market value.

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby homes are exact examples of why there might be a differential in price.

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

Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is written.

Myth: The replacement value of the house should be is on par with the market value.

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

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

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

Myth: As houses appreciate by a specific percentage - in a robust economy - the homes around the appreciating properties are expected to increase by the same amount.

Fact: Cost appreciation of a certain house must be concluded on an individualized basis, factoring in information on comparable properties and other relevant specifications within the home itself. This is true in excellent economic times as well as poor.

Myth: The home's outside is determinate of the actual price of the house; it is unnecessary to do an interior inspection.

Fact: To determine an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. As you can see, none of these factors can be derived just by looking at the house from the outside.

Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their property, they legally own their appraisal.

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. By the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be given one by their lending agency.

Myth: There's no need for consumers to even care about what the appraisal contains so long as their lending institution is satisfied.

Fact: Only if home buyers look over a copy of their report 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. There is an incredible amount of information contained in an appraisal report that will probably be useful to the consumer 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.