Common myths about appraising

It is required by law that an appraiser must be state-licensed to offer appraisals for federally-supported real estate sales in Colorado. You also have the right to request a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.

Myth: The value that is assessed by the appraiser must be equivalent to the market value.

Fact: While most states uphold the suggestion that assessed value equates estimated market value, this often is not the case. Often when interior remodeling has been done and the assessor is has not investigated the improvement or other houses in the area have not been reassessed for quite some time, it may vary wildly.

Myth: The opinion of value of a house will differ depending upon whether the appraisal is provided 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 complete his work with impartiality and independence, regardless for whom the appraisal is written.

Myth: The replacement cost of the house is always is on par with the market value.

Fact: Without any suggestion from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. The dollar amount required to reconstruct a home is what forms the replacement cost.

Myth: Appraisers use a formula, like a specific price per square foot, to figure out the worth of a property.

Fact: An appraisal report is an amalgamation of data concluded from the property's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can depend on M Davies Appraisal LLC's appraisers to be forthright in assessing this information.

Myth: When the economy is doing well and the value of homes are found to be increasing by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.

Fact: All appreciation of worth is on an individual basis, found by information on relevant considerations and the data of comparable homes. This is true in fair economic times as well as bad.

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

Fact: Property worth is determined by a multitude of variables, including area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information needed.

Myth: Considering that the consumer is the party who puts up the money 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 lender - unless the lender "relinquishes its interest" in the appraisal. However, home buyers have to be given a copy of the document upon written request, because of the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal so long as it satisfies the needs of their lending company.

Fact: Only if home buyers check out a copy of their appraisal 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. An appraisal report can double as a record for the future, as it contains a great deal of information - including, but certainly 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 vicinity.