Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to produce legitimate appraisal reports for federally-backed purchase. You are also entitled by law to demand a copy of the finished appraisal from your lender. Contact A. M. Appraisals if you have any questions about the appraisal procedure.

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

Fact: It is possible that South Carolina, like most states, validates the common myth that the assessed value equals the market value; however, this is not always true. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended period.

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

Fact: There is no personal interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is conducted.

Myth: Market value will approximate replacement cost.

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

Myth: Appraisers use a calculation, such as a specific price per square foot, to conclude the worth of a home.

Fact: There are many varied methods that an appraiser will use to make a detailed investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable houses.

Myth: As houses increase their worth by a certain percentage - in a strong economy - the houses in proximity are figured to increase by the same amount.

Fact: Cost increase of a certain home has to be concluded on an individualized basis, factoring in data on comparable houses and other relevant specifications within the home itself. This is true in good economic times as well as bad.

Myth: You can generally see what a property is worth simply by looking at the outside.

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by inspecting the property from the outside.

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

Fact: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the report. Because of the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be provided with one by their lending company.

Myth: Home buyers need not be concerned with what is in their appraisal so long as it satisfies the needs of their lending institution.

Fact: A consumer should definitely inspect their appraisal report; there might be some questions or some worries 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 appraisal can serve as a record for the future, since it contains an incredible amount of 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.