Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related purchases. The law allows you to acquire a copy of your completed appraisal report from your lending agency after it has been provided. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value generally will equate to market value.

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

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

Fact: The value of the property does not affect the salary of the appraiser; as such, the appraiser has no personal interest in the opinion of value of the property. Obviously, he will render business with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Market value will approximate replacement cost.

Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. Replacement value is the dollar amount required to rebuild a home in-kind.

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

Fact: Appraisers make a comprehensive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent costs of comparable homes.

Myth: In a powerful economy - when the worth of houses in a given neighborhood are reported to be rising by a certain percentage - the prices of individual houses in the vicinity can be expected to increase by that same percentage.

Fact: All appreciation of price is on an individual basis, determined by data on relevant elements and the data of comparable homes. This is true in excellent economic times as well as poor.

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

Fact: To find an accurate value beyond all doubt, an appraiser must assess the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information necessary.

Myth: Since the consumer is the party who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report. By the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be provided with it by their lender.

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

Fact: Only if consumers read a copy of their report can they verify 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 that should 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 area.