Appraisal myths & facts

It is mandated by law that an appraiser needs to be state-licensed to produce appraisal reports for federally-related property transactions in Florida. Also by law, you have the right to demand a copy of the completed report from your lending agency. Contact Appraisal Pros LLC if you have any questions about the appraisal process.

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

Fact: While most states back the idea that assessed value is equal to estimated market value, this generally is not the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an extended period of time.

Myth: The buyer or the seller can have some pull in the value of the house depending upon for whom the appraiser is working.

Fact: There is no personal interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.

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

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

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

Fact: There are many different methods that an appraiser will use to make a full analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable homes.

Myth: In a strong economy - when the sales prices of houses in a given region are found to be increasing by a certain percentage - the worth of individual properties in the vicinity can be expected to appreciate by that same percentage.

Fact: Any price at which an appraiser arrives in regards to a specific home is always personalized, based on certain factors found from the data of comparable houses and other considerations within the house itself. It makes no difference if the economy is powerful or terrible.

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

Fact: To conclude an accurate worth beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these things can be derived just by looking at the home from the exterior.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance your house, you own the produced appraisal report.

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

Myth: Consumers need not worry about what is in their report so long as it meets the necessities of their lending agency.

Fact: Only if consumers check out a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, as it contains a great deal of information - including, but certainly 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 area.