Appraisal myths & facts

It is enforced by law that an appraiser must be state-licensed to perform appraisals for federally-supported real estate transactions in Maryland. The law allows you to get a copy of your finished appraisal from your lender after it has been produced. Contact Magee Appraisal Service if you have any questions about the appraisal procedure.

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

Fact: It is possible that Maryland, like most states, supports the idea that the assessed value equates to the market value; however, this is not always true. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby homes are exact examples of why this occurs.

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

Fact: The appraiser has no vested interest in the outcome of the appraisal report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value will approximate replacement cost.

Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house. If the property were reconstructed, the dollar amount needed to do so would set the replacement cost.

Myth: There are specific ways that real estate appraisers use to find the cost of a home, such as the price per square foot.

Fact: There are many varied processes that an appraiser will use to make a comprehensive investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable properties.

Myth: As homes appreciate by a specific percentage - in a strong economy - the houses nearby are expected to appreciate by the same amount.

Fact: Any value at which an appraiser arrives concerning a particular home is always personalized, based on certain factors derived from the data of comparable properties and other specifications within the property itself. It makes no difference if the economy is good or poor.

Myth: You can commonly see what a house is worth simply by looking at the outside.

Fact: House value is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply looking at the home from the exterior.

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

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be given a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their appraisal report so long as it satisfies the necessities of their lending agency.

Fact: A home buyer should definitely read through their document; there will probably be some questions or some worries about the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, filled with useful and often-revealing information - 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 vicinity.