Appraisal myths debunked

By law, an appraiser needs to be state-licensed to produce appraisals for federally-supported sales. The law entitles you to acquire a copy of your completed appraisal from your lender after it has been provided. Contact The Residential Appraiser if you have any concerns about the appraisal procedure.

Myth: The value that is ascertained by the appraiser will be exactly the same as the market value.

Fact: It is possible that Colorado, like most states, supports the common myth that the assessed value is the same as the market value; however, this is not often the case. Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby houses are exact examples of why this occurs.

Myth: Depending on whether the appraisal is produced for the buyer or the seller, the cost of the house will vary.

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

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

Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a house without being under duress from any external group to purchase or sell. If the home were reconstructed, the dollar amount needed to do so would make up the replacement cost.

Myth: There are certain ways that real estate appraisers use to determine the cost of a property, such as the price per square foot.

Fact: An appraisal report is an assertion of data concluded from the house's size, location, proximity to specific facilities, the condition of the property and the value of recent comparable sales. You can rely on The Residential Appraiser's staff to be honest in assessing this data.

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

Fact: Cost increase of a certain home has to be determined on a case-by-case basis, factoring in information on comparable properties and other relevant elements. This is true in fair economic times as well as bad.

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

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

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

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. Consumers must be given a version of the document through request because of the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their appraisal document so long as it meets the requirements of their lending group.

Fact: Only if consumers read a copy of their appraisal report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, comprised of useful and often-revealing data - 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.