Appraisal myths & facts

By law, an appraiser needs to be state-licensed to offer appraisals for federally-related transactions. The law allows you to acquire a copy of your completed appraisal from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.

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

Fact: While most states uphold the suggestion that assessed value equates estimated market value, this usually is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are perfect examples of why there might be a differential in price.

Myth: The opinion of value of a house will vary depending upon if the appraisal is provided for the buyer or the seller.

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

Myth: Any time market value is established, it should equal the replacement cost of the property.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a property without being under pressure from any outside party to purchase or sell. The dollar amount necessary to reconstruct a house is what constitutes the replacement cost.

Myth: Appraisers use a formula, like a specific price per square foot, to arrive at the worth of a property.

Fact: An appraisal is an assertion of data based on the house's size, location, proximity to undesirable facilities, the condition of the house and the value of recent comparable sales. You can depend on Magee Appraisal Service's appraisers to be forthright in assessing this information.

Myth: As houses appreciate by a specific percentage - in a robust economy - the homes in proximity are figured to appreciate by the same amount.

Fact: Worth increase of a specific property has to be concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. It makes no difference if the economy is strong or on the decline.

Myth: You can generally tell what a property is worth simply by looking at the exterior.

Fact: House value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information required.

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

Fact: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, consumers have to be given a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.

Myth: There's no need for consumers to even concern themselves with what the appraisal report contains so long as their lender is fine with the contents therein.

Fact: A consumer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, since it contains an incredible amount of data - including, but not limited to 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.