Appraisal myths & facts

Legally, a real estate appraiser must be state certified to write substantiated real estate appraisals for federally-related transactions. You have the ability to demand a copy of the completed report from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value should always be the same as to market value.

Fact: While most states uphold the idea that assessed value is equal to estimated market value, this commonly is not the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an extended period of time.

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

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

Myth: Market value should approximate replacement cost.

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

Myth: Specific formulae, such as the price per square foot of the property, are what appraisers use to come to the cost of a property.

Fact: An appraisal report is an amalgamation of data based on the home's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can rely on M Davies Appraisal LLC's staff to be forthright in assessing this information.

Myth: As properties increase their worth by a specific percentage - in a robust economic state - the properties in proximity are expected to increase by the same amount.

Fact: Worth increase of a specific house has to be determined on an individualized basis, factoring in information on comparable properties and other relevant specifications within the home itself. It makes no difference whether the economy is good or poor.

Myth: You can usually find 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 home; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by looking at the home from the exterior.

Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance real estate, they own their appraisal report.

Fact: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. However, home buyers must be supplied with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even concern themselves with what the appraisal contains so long as their lender is fine with the contents therein.

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