Common myths about appraising

It is enforced by the government that a real estate appraiser must be state-licensed to produce appraisal reports for federally-related real estate sales in North Carolina. Also by law, you are allowed to receive a copy of the finished appraisal report 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 must be exactly the same as the market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for years or more, it may vary wildly.

Myth: The opinion of value of a home will differ depending upon if the appraisal is conducted for the buyer or the seller.

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

Myth: Market value should equal replacement cost.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under pressure to buy or sell. The dollar amount needed to reconstruct a home is what constitutes the replacement cost.

Myth: There are specific methods that appraisers use to show the value of a house, like the price per square foot.

Fact: There are many differing methods that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable houses.

Myth: As houses increase their worth by a certain percentage - in a strong economy - the homes in proximity are expected to appreciate by the same amount.

Fact: Any worth at which an appraiser concludes concerning a specific home is always personalized, based on certain factors pulled from the information of comparable homes and other considerations within the property itself. It doesn't matter if the economy is on the rise or declining.

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

Fact: To conclude an accurate value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. Obviously, none of these factors can be found just by looking at the property from the outside.

Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance real estate, they own their appraisal.

Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the report. Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with it by their lending agency.

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

Fact: A home buyer should definitely read through their appraisal report; there may be some questions or some worries with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a valuable record for future reference, comprised of 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.