Appraisal myths debunked

By law, an appraiser is required to be state-licensed to produce appraisals for federally-backed transactions. Also by law, you have the ability to demand a copy of the finished appraisal report from your lending agency. Contact Norman Appraisal Services if you have any concerns about the appraisal procedure.

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

Fact: It is probable that Florida, like most states, validates the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby houses are excellent examples of why this occurs.

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

Fact: The appraiser has no personal interest in the outcome of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: The replacement cost of the property is always is on par with the market value.

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

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

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

Myth: In a robust economy - when the prices of houses in a given county are found to be increasing by a particular percentage - the prices of individual properties in the proximity can be expected to appreciate by that same percentage.

Fact: All appreciation of price is on an individual basis, concluded by data on relevant conditions and the data of comparable homes. It makes no difference whether the economy is good or on the decline.

Myth: The home's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior inspection.

Fact: There are a number of different variables that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information needed.

Myth: Since you're the one providing the money for the appraisal when applying for the loan to buy or refinance real estate, you own the produced appraisal report.

Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report. However, home buyers must be given a copy of the report upon written request, under the Equal Credit Opportunity Act.

Myth: There's no need for home buyers to even concern themselves with what the report contains so long as their lending agency is fine with the contents therein.

Fact: It is almost imperative for home buyers to go through a copy of their appraisal report so that they can verify the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, containing helpful and often-revealing information - 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 vicinity.