Common myths about appraising

By law, an appraiser needs to be state-licensed to produce appraisals for federally-backed sales. The law gives you the right to receive a copy of your completed report from your lender after it has been provided. Contact Herrenbruck Appraisals, LLC if you have any concerns about the appraisal procedure.

Myth: Market value has to be similar to the assessed value of the property.

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. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are perfect examples of why there might be a differential in price.

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

Fact: The opinion of value of the property does not affect the salary of the appraiser; as such, the appraiser has no preconceived interest in the worth of the home. Obviously, he will conduct task with impartiality and independence regardless for whom the appraisal is created.

Myth: Market value will equate to replacement cost.

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 particular property. If the property were rebuilt, the dollar amount required to do so would make up the replacement cost.

Myth: There are certain methods that appraisers use to find the cost of a house, like the price per square foot.

Fact: Appraisers make an exhaustive analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent costs of comparable homes.

Myth: In a strong economy - when the worth of houses in a given area are found to be rising by a certain percentage - the worth of individual homes in the vicinity can be expected to appreciate by that same percentage.

Fact: Worth increase of a certain home must be concluded on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the house itself. This is true in fair economic times as well as poor.

Myth: Just looking at what the house looks like on the outside gives an idea of its cost.

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

Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your home, you own the ordered appraisal.

Fact: Legally, the document is owned by the lending agency unless the lender relinquishes their interest in the document. Home buyers must be provided with a version of the appraisal report upon written request due to the Equal Credit Opportunity Act.

Myth: Home buyers need not care about what is in their report so long as it satisfies the needs of their lending agency.

Fact: A home buyer should definitely read through their document; there may be some questions or some worries with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an appraisal that could be useful to the home buyer 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.