Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-backed transactions. Also by law, you have the ability to receive a copy of the completed appraisal from your lender. Contact Levison Appraisal Company if you have any concerns about the appraisal procedure.

Myth: Assessed value generally will equate to market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby properties are perfect examples of why there might be a differential in price.

Myth: The buyer or the seller will have impact in the cost of the house depending upon for whom the appraiser is working.

Fact: There is no real interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is created.

Myth: Any time market value is established, it should equate to the replacement cost of the property.

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a certain home, with neither being under pressure to buy or sell. The dollar amount required to rebuild a property is what forms the replacement cost.

Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the cost of a home.

Fact: There are many different processes that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable houses.

Myth: In a strong economy - when the prices of houses in a given area are reported to be rising by a certain percentage - the values of individual homes in the area can be expected to increase by that same percentage.

Fact: All increase of value is on an individual basis, determined by information on relevant conditions and the data of comparable houses. This is true in strong economic times as well as poor.

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

Fact: Property value is concluded by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found simply by examining the property from the exterior.

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

Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the appraisal. By the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with it by their lender.

Myth: It doesn't mean anything to consumers what's in the report so long as it meets the necessities of their lending agency.

Fact: Only if consumers check out 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. Also, the report makes an excellent record for future reference, comprised of useful 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 area.