Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-supported purchases. The law gives you the right to acquire a copy of your finished appraisal from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser is required to be exactly the same as the market value.

Fact: While most states uphold the concept that assessed value approximates estimated market value, this commonly is not the case. Generally when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the Princeton have not been reassessed for quite a while, it may vary wildly.

Myth: Depending on whether the appraisal is produced for the buyer or the seller, the cost of the property will vary.

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

Myth: Any time market value is established, it should be similar to the replacement cost of the home.

Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.

Myth: Specific formulae, like the price per square foot of the property, are the methods appraisers use to arrive at the price of a home.

Fact: Appraisers complete a full analysis of all factors in consideration to the worth of a home, including its location, condition, size, proximity to facilities and recent values of comparable homes.

Myth: In a strong economy - when the worth of properties in a given neighborhood are reported to be increasing by a particular percentage - the worth of individual houses in the vicinity can be expected to rise by that same percentage.

Fact: All increase of price is on an individual basis, concluded by information on relevant considerations and the data of comparable properties. This is true in excellent economic times as well as bad.

Myth: Just seeing what the property looks like on its exterior gives a good idea of its worth.

Fact: There are a number of different factors that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data necessary.

Myth: Since the consumer is the one who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal. Due the Equal Credit Opportunity Act, any home buyer asking for 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 report so long as it satisfies the needs of their lending agency.

Fact: Only if consumers check out a copy of their appraisal report can they ensure 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 a great deal of information contained in an appraisal report 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 proximity.