Appraisal myths & facts

Legally, an appraiser is required to be state certified to write legitimate real estate appraisals for federally-supported purchase. Also by law, you are allowed to demand a copy of the finished appraisal report from your lending agency. Contact Appraisal Nerd if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser should be equivalent to the market value.

Fact: It is probable that Virginia, like most states, supports the suggestion that the assessed value equates to the market value; however, this is not often the case. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for a good length of time, it may vary wildly.

Myth: The opinion of value of a property will vary depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: There is no personal 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 ordered.

Myth: Market value will equate to replacement cost.

Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. If the home were rebuilt, the dollar amount necessary to do so would be the replacement cost.

Myth: Certain methods, like the price per square foot, are the ways appraisers use to arrive at the value of a property.

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

Myth: In a robust economy - when the worth of homes in a given area are found to be rising by a certain percentage - the costs of individual houses in the area can be expected to rise by that same percentage.

Fact: All appreciation of worth is on a one-on-one basis, determined by information on relevant elements and the data of comparable homes. It makes no difference if the economy is excellent or bad.

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

Fact: There are a number of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information needed.

Myth: Since you're the one providing the money for the appraisal report when applying for the loan to buy or refinance real estate, you own the ordered appraisal report.

Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be provided with one by their lending company.

Myth: It doesn't matter to consumers what's in the report so long as it meets the necessities of their lender.

Fact: It is almost imperative for consumers to check over a copy of their report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, filled with useful and often-revealing data - including 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.