Appraisal myths & facts

Legally, an appraiser needs to be state certified to perform substantiated real estate appraisals for federally-related transactions. Also by law, you have the right to receive a copy of the finished appraisal report from your lending agency. Contact us if you have any questions about the appraisal procedure.

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

Fact: While most states back the idea that assessed value is equal to estimated market value, this commonly is not the case. Sometimes when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for a good length of time, it may vary wildly.

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

Fact: The cost of the home does not affect the payment of the appraiser; as such, the appraiser has no vested interest in the worth of the home. This means that he will provide business with impartiality and independence regardless for whom the appraisal is conducted.

Myth: The replacement cost of the home should be is on par with the market value.

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

Myth: Certain formulae, like the price per square foot of the property, are what appraisers use to determine the price of a property.

Fact: An appraisal is a collection of data concluded from the home's size, location, proximity to some facilities, the condition of the house and the price of recent comparable sales. You can depend on M Davies Appraisal LLC's staff to be ethical in assessing this information.

Myth: When the economy is doing well and the worth of houses are found to be rising by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.

Fact: Worth appreciation of a specific house must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant elements. This is true in good economic times as well as bad.

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

Fact: To determine an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found just by examining the property from the exterior.

Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to buy or refinance real estate, you own the produced appraisal.

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

Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the requirements of their lending company.

Fact: A home buyer should definitely inspect their appraisal report; there will probably be some questions or some worries about the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing a great deal of data - 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 proximity.