Common myths about appraising

Legally, an appraiser has to be state certified to perform legitimate real estate appraisals for federally-related sales. Also by law, you have the right to receive a copy of the completed report from your lending agency. Contact us if you have any questions about the appraisal process.

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

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the Tampa have not been reassessed for a good length of time, it may vary wildly.

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

Fact: The appraiser has no personal interest in the outcome of the appraisal and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: The replacement value of the home will be is on par with the market value.

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

Myth: Appraisers use a formula, such as a certain price per square foot, to conclude the cost of a house.

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

Myth: When the economy is robust and the value of properties are found to be rising by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.

Fact: Value increase of a specific house must be determined on an individualized basis, factoring in information on comparable homes and other relevant considerations. It makes no difference whether the economy is good or poor.

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

Fact: Home worth is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply looking at the house from the outside.

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

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Home buyers have to be given a copy of the appraisal report upon written request as per the Equal Credit Opportunity Act.

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

Fact: Only if consumers read a copy of their appraisal 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 a great deal of information contained in an appraisal report that should 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 region.

Myth: Appraisals are ordered only to estimate house values in home sales involving mortgage-lending transactions.

Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

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

Fact: An appraisal does not fulfill the same purpose as an inspection. An appraiser concludes on an opinion of value in the appraisal process and resulting report. A home inspector analyzes the condition of the house and its major components and reports their findings.