Common myths about appraising

By law, an appraiser needs to be state-licensed to produce appraisals for federally-backed transactions. Also by law, you have the right to receive a copy of the finished appraisal report from your lending agency. Contact us if you have any concerns about the appraisal process.

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

Fact: While most states uphold the concept that assessed value is equal to estimated market value, this commonly is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are exact examples of why this occurs.

Myth: The opinion of value of a house will be different depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The appraised value of the home does not affect the salary of the appraiser; because of this, the appraiser has no personal interest in the cost of the house. What this means is he will conduct job with impartiality and independence regardless for whom the appraisal is created.

Myth: Any time market value is established, it should be similar to the replacement cost of the home.

Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a property without being under influence from any external party to purchase or sell. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.

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

Fact: An appraisal report is an amalgamation of information concluded from the property's size, location, proximity to undesirable facilities, the condition of the home and the value of recent comparable sales. You can count on Crest Appraisal Services's staff to be forthright in assessing this information.

Myth: In a powerful economy - when the worth of homes in a given region are found to be rising by a particular percentage - the worth of individual houses in the proximity can be expected to increase by that same percentage.

Fact: Any price at which an appraiser arrives concerning a certain house is always personalized, based on certain factors found from the data of comparable properties and other considerations within the home itself. It makes no difference whether the economy is robust or poor.

Myth: The property's outside is determinate of the actual price of the house; there is no need to do an interior appraisal.

Fact: There are a number of different factors that conclude property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the house from the exterior.

Myth: Since the consumer is the one who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with it by their lender.

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

Fact: A consumer should definitely read through their document; there will probably be some questions or some concerns with the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, since it contains an exorbitant 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.