Common myths about appraising

Legally, an appraiser is required to be state certified to perform legitimate real estate appraisals for federally-related sales. You have the ability to demand a copy of the finished appraisal from your lending agency. Contact us if you have any questions about the appraisal process.

Myth: Market value will always be equivocal to the assessed value of the property.

Fact: It is probable that Florida, like most states, validates the common myth that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Generally when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for years or more, it may vary wildly.

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

Fact: The price of the property does not affect the salary of the appraiser; as a result, the appraiser has no preconceived interest in the cost of the property. This means that he will conduct business with impartiality and independence regardless for whom the appraisal is created.

Myth: Any time market value is established, it should equal the replacement cost of the property.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell. The replacement cost is the dollar amount necessary to reconstruct a property in-kind.

Myth: Specific formulae, like the price per square foot of the property, are what appraisers use to ascertain the cost of a home.

Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the cost of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.

Myth: As houses appreciate by a certain percentage - in a robust economy - the houses in proximity are expected to appreciate by the same amount.

Fact: Any worth at which an appraiser arrives concerning a certain house is always individualized, based on certain factors derived from the information of comparable properties and other considerations within the home itself. It doesn't matter if the economy is doing well or declining.

Myth: Just seeing what the house looks like on its exterior gives an excellent idea of its worth.

Fact: To conclude an accurate value beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just viewing the house from the exterior.

Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your home, you own the ordered appraisal.

Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with one by their lending company.

Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the necessities of their lending agency.

Fact: It is almost imperative for consumers to go through a copy of their report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve 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 proximity.