Common myths about appraising

Legally, an appraiser must be state certified to write legitimate real estate appraisals for federally-supported sales. You are also entitled by law to request a copy of the completed report from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Market value needs to be equivocal to the assessed value of the property.

Fact: It is possible that California, like most states, supports the common myth that the assessed value equals the market value; however, this certainly varies based on state-to-state. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.

Myth: The appraised value of a home will vary depending upon whether the appraisal is provided for the buyer or the seller.

Fact: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is created.

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

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under influence from any outside party to purchase or sell. The dollar amount required to reconstruct a home is what forms the replacement cost.

Myth: Specific methods, like the price per square foot, are the ways appraisers use to determine the worth of a house.

Fact: There are many varied calculations that an appraiser will use to make a detailed analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable homes.

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

Fact: Any cost at which an appraiser concludes in regards to a particular home is always individualized, based on certain factors derived from the information of comparable properties and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.

Myth: Just looking at what the property looks like on the outside gives an excellent idea of its worth.

Fact: There are a number of different factors that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply inspecting the property from the exterior.

Myth: Because the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given one by their lending agency.

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the needs of their lending agency.

Fact: A home buyer should definitely read through their report; there might be some questions or some concerns with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, containing helpful and often-revealing data - including, but 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 area.