Appraisal myths & facts

It is mandated by legal agencies that a real estate appraiser is required to be state-licensed to create appraisals for federally-related home sales in North Carolina. The law gives you the right to get a copy of your finished appraisal report from your lending agency after it has been provided. Contact Herrin Appraisal Company if you have any questions about the appraisal process.

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

Fact: It could be that North Carolina, like most states, validates the suggestion that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. At times when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: The value of a house will be different depending upon if the appraisal is provided for the buyer or the seller.

Fact: The opinion of value of the property does not affect the payment of the appraiser; as a result, the appraiser has no personal interest in the opinion of value of the home. What this means is he will conduct services with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Market value should equal replacement cost.

Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. Replacement value is the dollar amount needed to reconstruct a property in-kind.

Myth: Specific methods, such as the price per square foot of the property, are the methods appraisers use to determine the cost of a home.

Fact: There are many numerous methods that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable houses.

Myth: As houses appreciate by a specific percentage - in a robust economic state - the homes in proximity are expected to appreciate by the same amount.

Fact: Price appreciation of a certain property has to be determined on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the house itself. This is true in strong economic times as well as bad.

Myth: You can generally see what a house is worth simply by looking at the exterior.

Fact: There are a number of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information required.

Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their house, they own their appraisal report.

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. Home buyers have to be given a version of the document upon written request because of the Equal Credit Opportunity Act.

Myth: Home buyers need not care about what is in their appraisal so long as it exceeds the requirements of their lending company.

Fact: Only if consumers read a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an report that will probably 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 region.