Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related transactions. Also by law, you are allowed to demand a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal process.

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

Fact: It is possible that Florida, like most states, validates the suggestion that the assessed value equals the market value; however, this is not often the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an extended period of time.

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

Fact: The value of the house does not affect the pay of the appraiser; as a result, the appraiser has no pressured interest in the value of the house. Obviously, he will provide job with impartiality and objectivity regardless for whom the appraisal is provided.

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

Fact: Market value is acquired by what a willing buyer would be interested in paying 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 reconstruct a home in-kind.

Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the worth of a home.

Fact: There are many varied calculations that an appraiser will use to make an in-depth analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable homes.

Myth: As houses increase their worth by a certain percentage - in a strong economic state - the homes within the same neighborhood are figured to appreciate by the same amount.

Fact: Any price at which an appraiser arrives in regards to a specific property is always personalized, based on certain factors pulled from the data of comparable homes and other considerations within the home itself. This is true in good economic times as well as bad.

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

Fact: House worth is determined by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just examining the property from the outside.

Myth: Since you're the one paying for the appraisal when applying for your loan to buy or refinance real estate, you own the ordered appraisal.

Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the document. However, consumers have to be provided with a copy of the appraisal report upon written request, due to the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the necessities of their lending company.

Fact: A consumer should definitely inspect their document; there could be some questions or some concerns with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing a great deal of data - 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 proximity.