Appraisal myths debunked

By law, an appraiser needs to be state-licensed to perform appraisals for federally-supported purchases. Also by law, you have the right to receive a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser should be the same as the market value.

Fact: While most states uphold the idea that assessed value is the same as estimated market value, this commonly is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are exact examples of why the price can vary.

Myth: The buyer or the seller sometimes may have an influence in the cost of the property depending upon for whom the appraiser is working.

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

Myth: The replacement cost of the home should be is on par with the market value.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a certain home, with neither being under duress to buy or sell. The dollar amount demanded to reconstruct a home is what constitutes the replacement cost.

Myth: There are specific methods that real estate appraisers use to determine the cost of a house, like the price per square foot.

Fact: An appraisal report is an assertion of data concluded from the property's size, location, proximity to specific facilities, the condition of the house and the value of recent comparable sales. You can count on Magee Appraisal Service's staff to be ethical in assessing this data.

Myth: When the economy is robust and the value of homes are reported to be rising by a certain percentage, the other homes in the area can be expected to rise based on that same percentage.

Fact: All increase of price is on an individual basis, concluded by information on relevant elements and the data of comparable houses. It makes no difference whether the economy is robust or bad.

Myth: Just examining what the property looks like on the outside gives an idea of its value.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the house on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply examining the home from the exterior.

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

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. By the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be given it by their lending agency.

Myth: Consumers need not worry about what is in their appraisal report so long as it exceeds the needs of their lending institution.

Fact: It is very important for consumers to look at a copy of their appraisal report so that they can verify the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an report that should 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 vicinity.