Appraisal myths debunked

It is mandated by the government that an appraiser is required to be state-licensed to produce appraisals for federally-related home transactions in North Carolina. The law gives you the right to receive a copy of your completed appraisal from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value generally will be equal to market value.

Fact: It is probable that North Carolina, like most states, validates the idea that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Generally when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the area have not been reassessed for a good length of time, it may vary wildly.

Myth: The buyer or the seller may have some pull in the cost of the home depending upon for whom the appraiser is working.

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

Myth: Market value will equate to replacement cost.

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under pressure to buy or sell. The replacement cost is the dollar amount needed to rebuild a home in-kind.

Myth: Appraisers use a formula, such as a certain price per square foot, to arrive at the worth of a house.

Fact: Appraisers make an exhaustive analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.

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

Fact: Any cost at which an appraiser arrives in regards to a specific property is always personalized, based on certain factors pulled from the information of comparable homes and other specifications within the property itself. This is true in excellent economic times as well as poor.

Myth: Just looking at what the property looks like on its exterior gives an excellent idea of its cost.

Fact: To conclude an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. An outside-only inspection definitely can't provide all of the information necessary.

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

Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. Home buyers have to be supplied with a copy of the report upon written request because of the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it meets the requirements of their lending company.

Fact: It is a very good idea for consumers to check over a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored in an report that can 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 area.