Appraisal myths debunked

By law, an appraiser must be state-licensed to offer appraisals for federally-related sales. Also by law, you have the ability to demand a copy of the finished appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser should be the same as the market value.

Fact: While most states back the idea that assessed value equates estimated market value, this often is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged time.

Myth: The buyer or the seller often will have some pull in the cost of the property depending upon for whom the appraiser is working.

Fact: The appraiser has no vested interest in the result of the report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value will equate to replacement cost.

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. The dollar amount required to reconstruct a property is what forms the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the value of a home.

Fact: An appraisal is an amalgamation of information based on the property's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can rely on Paradigm Appraisal Service's staff to be honest in assessing this information.

Myth: As properties appreciate by a specific percentage - in a robust economic state - the homes in proximity are figured to increase by the same amount.

Fact: Any worth at which an appraiser concludes concerning a particular property is always individualized, based on certain factors found from the information of comparable houses and other considerations within the property itself. This is true in good economic times as well as poor.

Myth: The home's exterior is determinate of the actual value of the house; it is unnecessary to do an interior inspection.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found simply by examining the house 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 your home, you own the produced appraisal.

Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be supplied with a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even care about what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: Only if home buyers examine a copy of their appraisal report 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. There is a great deal of information stored in an appraisal report that can 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.