Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-supported transactions. Also by law, you have the right to demand a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value generally will be similar to to market value.

Fact: It is probable that North Carolina, like most states, validates the idea that the assessed value is no different from the market value; however, this is not always true. At times when interior remodeling has been done and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for a good length of time, it may vary wildly.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the value of the property will vary.

Fact: The opinion of value of the property does not affect the salary of the appraiser; as such, the appraiser has no personal interest in the opinion of value of the house. What this means is he will render services with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Market value should approximate replacement cost.

Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house. The dollar amount required to rebuild a home is what constitutes the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the cost of a home.

Fact: Appraisers make a detailed analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent worth of comparable homes.

Myth: When the economy is robust and the value of homes are found to be rising by a certain percentage, the other houses in the neighborhood can be expected to rise based on that same percentage.

Fact: Any value at which an appraiser arrives concerning a certain property is always personalized, based on certain factors pulled from the data of comparable properties and other considerations within the property itself. This is true in fair economic times as well as poor.

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

Fact: To determine an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived simply by looking at the home from the exterior.

Myth: Since you're the one paying for the appraisal report when applying for your loan to buy or refinance your home, you own the produced appraisal report.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that ordered the appraisal. Consumers have to be provided with a version of the document through request as per the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal so long as it satisfies the necessities of their lending agency.

Fact: A home buyer should definitely look through their document; there may be some questions or some concerns about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, comprised of helpful 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.