Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-backed sales. The law entitles you to receive a copy of your completed appraisal report from your lender after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value should be equal to market value.

Fact: While most states support the concept that assessed value is equal to estimated market value, this often is not the case. Often when interior remodeling has been done and the assessor is has not investigated the improvement or other houses in the Caguas have not been reassessed for years or more, it may vary wildly.

Myth: Depending on whether the appraisal is produced 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 result of the report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.

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

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a specific property, with neither being under pressure to buy or sell. If the home were rebuilt, the dollar amount necessary to do so would set the replacement cost.

Myth: Specific methods, like the price per square foot of the property, are the methods appraisers use to ascertain the value of a house.

Fact: Appraisers make an exhaustive analysis of all factors pertaining to the worth of a home, including its location, condition, size, proximity to facilities and recent values of comparable properties.

Myth: In a powerful economy - when the prices of properties in a given neighborhood are reported to be appreciating by a certain percentage - the worth of individual properties in the vicinity can be expected to rise by that same percentage.

Fact: Price increase of a certain house must be concluded on an individualized basis, factoring in information on comparable properties and other relevant specifications within the home itself. It makes no difference if the economy is robust or terrible.

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

Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these variables can be found just by looking at the property from the exterior.

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

Fact: Legally, the appraisal is owned by the lending company unless the lender relinquishes their interest in the document. However, consumers must be supplied with a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the requirements of their lender.

Fact: A consumer should definitely inspect their document; there could be some questions or some concerns with the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, as it contains an incredible amount 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 vicinity.

Myth: Appraisals are ordered only to estimate building values in house sales involving mortgage-lending deals.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: You don't need to get an appraisal if you have had a home inspection.

Fact: A home inspection has a completely different purpose than an appraisal report. The appraiser forms an opinion of value in the appraisal process and resulting appraisal report. House inspectors will write a report that will determine the condition of the house and its major components and possible damage.