Common myths about appraising

By law, an appraiser must be state-licensed to produce appraisals for federally-supported sales. The law allows you to receive a copy of your finished report from your lending agency after it has been produced. Contact Karen A. Zirpoli - KAZ Appraisals, LLC if you have any questions about the appraisal procedure.

Myth: Assessed value should always equate to market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or other houses in the neighborhood have not been reassessed for a good length of time, it may vary wildly.

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

Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is created.

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

Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. Replacement value is the dollar amount needed to reconstruct a property in-kind.

Myth: Appraisers use a calculation, like a specific price per square foot, to come to the cost of a property.

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 costs of comparable homes.

Myth: As homes increase their worth by a certain percentage - in a strong economic state - the homes around the appreciating properties are expected to increase by the same amount.

Fact: Value increase of a specific property has to be concluded on a case-by-case basis, factoring in data on comparable homes and other relevant elements. This is true in good economic times as well as poor.

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

Fact: There are a number of different variables that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the home from the exterior.

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

Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the appraisal. However, home buyers must be supplied with a copy of the document upon written request, through the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even care about what the appraisal report contains so long as their lending institution is fine with the contents therein.

Fact: A home buyer should definitely look through their report; there will probably be some questions or some concerns with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, containing useful and often-revealing data - including 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.