Common myths about appraising

By law, an appraiser needs to be state-licensed to perform appraisals for federally-supported sales. The law allows you to acquire a copy of your completed appraisal report from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser is required to be the same as the market value.

Fact: While most states back the idea that assessed value is the same as estimated market value, this often is not the case. Generally when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: Depending on whether the appraisal is provided for the buyer or the seller, the cost of the house will vary.

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

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

Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular house, with neither being under duress to buy or sell. Replacement cost is the dollar amount needed to reconstruct a property in-kind.

Myth: There are specific ways that real estate appraisers use to show the value of a property, like the price per square foot.

Fact: An appraisal is an assertion of information based on the house's size, location, proximity to certain facilities, the condition of the home and the price of recent comparable sales. You can count on LHC Appraisals's appraisers to be honest in assessing this data.

Myth: As properties increase their worth by a specific percentage - in a robust economy - the homes around the appreciating properties are expected to appreciate by the same amount.

Fact: Any price at which an appraiser concludes concerning a specific home is always individualized, based on certain factors pulled from the information of comparable homes and other specifications within the property itself. It makes no difference whether the economy is powerful or bad.

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

Fact: To conclude an accurate price beyond all doubt, an appraiser must examine the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no possible way to get all of this information from just inspecting the house from the outside.

Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance real estate, you own the provided appraisal.

Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending agency that purchased the appraisal. Home buyers must be given a copy of the report upon written request as per the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their report so long as it satisfies the requirements of their lending agency.

Fact: Only if home buyers examine a copy of their appraisal report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, containing a great deal of information - 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: The only reason someone would order an appraisal is if a property needs its price assessed in a lender-based sales transaction.

Fact: Depending upon their qualifications and designations, appraisers can and often do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: A property inspection serves the same purpose as an appraisal.

Fact: Appraisal reports have almost nothing in common with a home inspection report. An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. House inspectors will compose a report that will show the condition of the house and its major components and possible damage.

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