Common myths about appraising

Legally, a real estate appraiser must be state certified to produce legitimate real estate appraisals for federally-related transactions. Also by law, you are entitled to request a copy of the finished appraisal from your lender. Contact us if you have any questions about the appraisal process.

Myth: Assessed value generally will be the same as to market value.

Fact: While most states back the suggestion that assessed value is equal to estimated market value, this often is not the case. There are times when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.

Myth: Depending on if the appraisal is written for the buyer or the seller, the value of the home will vary.

Fact: The appraiser has no personal interest in the outcome of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value should equal replacement cost.

Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a house without being under duress from any outside group to buy or sell. If the house were reconstructed, the dollar amount required to do so would make up the replacement cost.

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

Fact: An appraisal is a collection of information concluded from the home's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can rely on CR&S Appraisal Services's appraisers to be forthright in assessing this information.

Myth: In a robust economy - when the values of properties in a given county are reported to be increasing by a particular percentage - the prices of individual properties in the proximity can be expected to rise by that same percentage.

Fact: All appreciation of worth is on a one-on-one basis, concluded by data on relevant considerations and the data of comparable homes. It doesn't matter if the economy is on the rise or declining.

Myth: Just examining what the house looks like on the outside gives an excellent idea of its worth.

Fact: Home value is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived just by viewing the property from the outside.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their house, they own their appraisal report.

Fact: Legally, the report is owned by the lending company unless the lender relinquishes their interest in the appraisal. However, consumers have to be supplied with a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even concern themselves with what the appraisal report contains so long as their lending company is fine with the contents therein.

Fact: A consumer should definitely read through their report; there will probably be some questions or some concerns with the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained 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 proximity.