Appraisal myths & facts

It is required by the government that a real estate appraiser needs to be state-licensed to offer appraisals for federally-supported real estate sales in North Carolina. Also by law, you have the right to demand a copy of the finished report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value should be similar to 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. Interior remodeling that the assessor is unaware of 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 an influence in the cost of the home depending upon for whom the appraiser is working.

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

Myth: The replacement value of the home is always is on par with the market value.

Fact: Market value is based on 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 reconstruct a house in-kind.

Myth: There are specific methods that real estate appraisers use to determine the opinion of value of a home, such as the price per square foot.

Fact: An appraisal report is an amalgamation of information based on the property's size, location, proximity to specific facilities, the condition of the house and the value of recent comparable sales. You can depend on James Earp Appraisal Service's staff to be forthright in assessing this information.

Myth: When the economy is robust and the worth of homes are reported to be rising by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.

Fact: All appreciation of value is on a case-by-case basis, concluded by information on relevant conditions and the data of comparable properties. It makes no difference if the economy is good or bad.

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

Fact: To determine an accurate value beyond all doubt, an appraiser must assess the property on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by viewing the home from the outside.

Myth: Since the consumer is the one who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the report. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be given it by their lending company.

Myth: There's no need for consumers to even concern themselves with what the appraisal report contains so long as their lender is fine with the contents therein.

Fact: It is very important for home buyers to read a copy of their appraisal report so that they can verify 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. An appraisal 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 vicinity.