Common myths about appraising

Legally, a real estate appraiser needs to be state certified to perform substantiated appraisal reports for federally-backed purchase. You also have the right to demand a copy of the finished report from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Market value should be the same as the assessed value of the property.

Fact: While most states uphold the idea that assessed value approximates estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an extended time.

Myth: The appraised value of a house will change depending upon whether the appraisal is ordered for the buyer or the seller.

Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is written.

Myth: Market value should equate to replacement cost.

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home. Replacement cost is the dollar amount needed to reconstruct a property in-kind.

Myth: There are certain methods that appraisers use to determine the opinion of value of a house, such as the price per square foot.

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

Myth: When the economy is doing well and the sales prices of houses are found to be increasing by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.

Fact: All increase of worth is on a one-on-one basis, concluded by data on relevant considerations and the data of comparable properties. It makes no difference whether the economy is strong or bad.

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

Fact: To conclude an accurate value beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. Obviously, none of these things can be derived just by examining the home from the outside.

Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their house, they own their appraisal.

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. Consumers have to be provided with a version of the document upon written request as per the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even care about what the appraisal report contains so long as their lending agency is satisfied.

Fact: A home buyer should definitely look through their document; there might be some questions or some concerns with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an appraisal that should 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 region.