Appraisal myths debunked

It is required by legal agencies that a real estate appraiser is required to be state-licensed to produce appraisal reports for federally-related home sales in North Carolina. You are also entitled by law to request a copy of the finished appraisal report from your lending agency. Contact us if you have any questions about the appraisal procedure.

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

Fact: It is probable that North Carolina, like most states, validates the suggestion that the assessed value equates to the market value; however, this is not often the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged time.

Myth: The buyer or the seller may have leverage in the value of the house depending upon for whom the appraiser is working.

Fact: The price of the home does not affect the pay of the appraiser; as such, the appraiser has no pressured interest in the value of the property. What this means is he will render business with impartiality and independence regardless for whom the appraisal is created.

Myth: Market value will equal replacement cost.

Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific property. If the house were reconstructed, the dollar amount needed to do so would form the replacement cost.

Myth: Specific formulae, such as the price per square foot, are the methods appraisers use to arrive at the price of a home.

Fact: An appraisal is an amalgamation of information based on the house's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can rely on Herrin Appraisal Company's appraisers to be forthright in assessing this data.

Myth: When the economy is doing well and the sales prices of properties are found to be increasing by a certain percentage, the other houses in the proximity can be expected to appreciate based on that same percentage.

Fact: All appreciation of value is on a one-on-one basis, found by information on relevant conditions and the data of comparable properties. It makes no difference whether the economy is excellent or bad.

Myth: Just looking at what the property looks like on its exterior gives a good idea of its cost.

Fact: There are a number of different variables that show the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply looking at the property from the exterior.

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

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Home buyers have to be provided with a version of the document upon written request due to the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their document so long as it exceeds the needs of their lending agency.

Fact: A consumer should definitely look through their appraisal report; there will probably be some questions or some concerns about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored in an appraisal 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.