Appraisal myths & facts

By law, an appraiser is required to be state-licensed to perform appraisals for federally-related sales. You are also entitled by law to demand a copy of the completed appraisal report from your lending agency. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value should be similar to to market value.

Fact: While most states back the idea that assessed value approximates estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an prolonged time.

Myth: The appraised value of a house will vary depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: The appraiser has no personal interest in the result of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Any time market value is established, it should be the same as the replacement cost of the house.

Fact: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house. Replacement cost is the dollar amount necessary to rebuild a house in-kind.

Myth: Certain methods, like the price per square foot of the property, are the methods appraisers use to arrive at the price of a property.

Fact: An appraisal report is an amalgamation of information concluded from the property's size, location, proximity to some facilities, the condition of the house and the value of recent comparable sales. You can rely on Alwen Appraisal, LLC's staff to be professional in assessing this information.

Myth: As homes increase their worth by a specific percentage - in a strong economy - the houses within the same neighborhood are figured to increase by the same amount.

Fact: All increase of price is on a case-by-case basis, determined by information on relevant conditions and the data of comparable properties. This is true in strong economic times as well as bad.

Myth: The property's outside is determinate of the actual price of the property; it is unnecessary to do an interior inspection.

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data needed.

Myth: Considering that the consumer is the person who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.

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

Myth: There's no reason for home buyers to even concern themselves with what the report contains so long as their lender is satisfied.

Fact: A consumer should definitely inspect their document; there may be some questions or some worries with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an appraisal that will probably be useful to the consumer 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.