Common myths about appraising

Legally, an appraiser has to be state certified to write legitimate appraisal reports for federally-backed purchase. The law allows you to receive a copy of your completed appraisal from your lender after it has been provided. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value should always be equal to market value.

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Usually when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the area have not been reassessed for quite some time, it may vary wildly.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the home will vary.

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

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

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

Myth: There are certain methods that real estate appraisers use to determine the value of a house, like the price per square foot.

Fact: An appraisal report is an amalgamation of information based on the home's size, location, proximity to undesirable facilities, the condition of the property and the cost of recent comparable sales. You can rely on Accurate Appraisals of KC's staff to be forthright in assessing this data.

Myth: When the economy is on the rise and the sales prices of homes are found to be appreciating by a certain percentage, the other properties in the vicinity can be expected to appreciate based on that same percentage.

Fact: Any cost at which an appraiser concludes in regards to a particular property is always individualized, based on certain factors found from the information of comparable properties and other considerations within the home itself. This is true in fair economic times as well as poor.

Myth: Just seeing what the home looks like on the outside gives an excellent idea of its cost.

Fact: Home worth is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by viewing the home from the exterior.

Myth: Because the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the document. Consumers must be given a copy of the document upon written request because of the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their appraisal so long as it meets the requirements of their lending institution.

Fact: A consumer should definitely inspect their document; there could be some questions or some concerns about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an report that can 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.