Appraisal myths & facts

Legally, an appraiser must be state certified to produce legitimate real estate appraisals for federally-related purchase. Also by law, you are allowed to demand a copy of the finished report from your lender. Contact us if you have any questions about the appraisal process.

Myth: Market value will be the same as the assessed value of the property.

Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this commonly is not the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby properties are excellent examples of why this occurs.

Myth: Depending on whether the appraisal is done for the buyer or the seller, the opinion of value of the home will vary.

Fact: The appraiser has no personal interest in the result of the appraisal report and should complete his task 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 likely pay a willing seller for a particular home, with neither being under pressure to buy or sell. The dollar amount needed to rebuild a home is what constitutes the replacement cost.

Myth: There are certain ways that appraisers use to find the value of a home, such as the price per square foot.

Fact: There are many differing formulae that an appraiser will use to make an in-depth analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable properties.

Myth: In a robust economy - when the worth of houses in a given neighborhood are reported to be rising by a particular percentage - the prices of individual houses in the area can be expected to increase by that same percentage.

Fact: All increase of price is on a case-by-case basis, concluded by information on relevant considerations and the data of comparable houses. It makes no difference whether the economy is robust or poor.

Have other questions about appraisers, appraising or real estate in Wake County or Raleigh, NC?

Contact our professional staff

Myth: The property's outside is determinate of the actual price of the home; it is unnecessary to do an interior inspection.

Fact: To conclude an accurate value beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. An exterior inspection certainly can't provide all of the data required.

Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance your house, you own the provided appraisal.

Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Due the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be given it by their lending company.

Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the requirements of their lender.

Fact: It is almost imperative for home buyers to read a copy of their appraisal so that they can double-check the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an report that will probably 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.

Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a home during a sales transaction involving a lending institution.

Fact: Based upon their qualifications and designations, appraisers can and often do perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: You shouldn't need to get an appraisal if you order a home inspection.

Fact: Appraisal reports are nothing like a home inspection report. The purpose of an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. The job of a home inspector is to assess the condition of the house and its main components, then compose a report on these inspection.