Common myths about appraising

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed purchases. You also have the right to acquire a copy of the finished appraisal report from your lender. Contact us if you have any questions about the appraisal process.

Myth: Assessed value should equate to market value.

Fact: While most states support the idea that assessed value equates estimated market value, this generally is not the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby homes are exact examples of why the price can vary.

Myth: The buyer or the seller will have impact in the cost of the property depending upon for whom the appraiser is working.

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

Myth: Market value should equate to replacement cost.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific house, with neither being under undue influence to buy or sell. Replacement cost is the dollar amount required to rebuild a home in-kind.

Myth: Certain methods, like the price per square foot of the property, are what appraisers use to determine the value of a property.

Fact: An appraisal is a collection of information concluded from the home's size, location, proximity to some facilities, the condition of the property and the value of recent comparable sales. You can depend on James Earp Appraisal Service's appraisers to be ethical in assessing this information.

Myth: In a strong economy - when the worth of homes in a given region are reported to be rising by a certain percentage - the values of individual properties in the proximity can be expected to increase by that same percentage.

Fact: All increase of value is on a one-on-one basis, concluded by data on relevant elements and the data of comparable houses. It makes no difference whether the economy is robust or on the decline.

Myth: You can commonly find what a home is worth simply by looking at the outside.

Fact: There are a multitude of different factors that show the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just inspecting the property from the exterior.

Myth: Because the consumer is the one who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the appraisal. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be provided with it by their lender.

Myth: There's no reason for consumers to even care about what the appraisal report contains so long as their lending company is satisfied.

Fact: Only if consumers read a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, filled with useful and often-revealing information - 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 proximity.