Common myths about appraising

By law, an appraiser needs to be state-licensed to offer appraisals for federally-backed sales. Also by law, you are entitled to request a copy of the finished report from your lending agency. Contact Ashley Real Estate if you have any questions about the appraisal procedure.

Myth: Market value needs to be equivocal to the assessed value of the property.

Fact: While most states uphold the concept that assessed value is equal to estimated market value, this usually is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are prime examples of why this occurs.

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

Fact: The price of the home does not affect the pay of the appraiser; as such, the appraiser has no pressured interest in the value of the property. This means that he will render services with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: Market value will equal replacement cost.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any external party to buy or sell. If the house were reconstructed, the dollar amount needed to do so would make up the replacement cost.

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

Fact: An appraisal report is an amalgamation of information based on the property's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can depend on Ashley Real Estate's staff to be honest in assessing this data.

Myth: When the economy is on the rise and the sales prices of properties are found to be rising by a certain percentage, the other homes in the neighborhood can be expected to increase based on that same percentage.

Fact: Any worth at which an appraiser arrives in regards to a specific house is always individualized, based on certain factors pulled from the information of comparable properties and other considerations within the property itself. This is true in fair economic times as well as bad.

Myth: The property's exterior is determinate of the actual price of the property; there is no need to do an interior appraisal.

Fact: There are a multitude of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be found simply by inspecting the property from the exterior.

Myth: Since you're the one paying for the appraisal report when applying for the loan to purchase or refinance your house, you own the provided appraisal report.

Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the report. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be provided with it by their lending agency.

Myth: Consumers need not be concerned with what is in their appraisal report so long as it exceeds the necessities of their lending group.

Fact: It is a very good idea for consumers to read a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, containing helpful and often-revealing data - including 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.