Common myths about appraising

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-related purchases. The law gives you the right to get a copy of your finished appraisal report from your lending agency after it has been produced. Contact Harper & Strickland, Inc. if you have any concerns about the appraisal procedure.

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

Fact: While most states uphold the concept that assessed value equates estimated market value, this often is not the case. Generally when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the area have not been reassessed for quite a while, it may vary wildly.

Myth: The appraised value of a home will vary depending upon if the appraisal is produced for the buyer or the seller.

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

Myth: Any time market value is established, it should equate to the replacement cost of the house.

Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home. If the home were reconstructed, the dollar amount needed to do so would form the replacement cost.

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

Fact: An appraisal report is an amalgamation of information concluded from the house's size, location, proximity to specific facilities, the condition of the home and the cost of recent comparable sales. You can rely on Harper & Strickland, Inc.'s appraisers to be ethical in assessing this information.

Myth: As houses increase their worth by a certain percentage - in a strong economic state - the properties around the appreciating properties 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 concluded from the data of comparable houses and other considerations within the home itself. This is true in fair economic times as well as poor.

Myth: Just looking at what the home looks like on its exterior gives an excellent idea of its cost.

Fact: Property value is concluded by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply viewing the home from the exterior.

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

Fact: Legally, the report is owned by the lending company unless the lender releases their interest in the appraisal. Because of the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with it by their lending company.

Myth: Home buyers need not worry about what is in their document so long as it meets the needs of their lending group.

Fact: It is a very good idea for home buyers to check over a copy of their appraisal so that they can double-check the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, filled with helpful and often-revealing data - including, but 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 area.