Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-supported sales. You are also entitled by law to demand a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal process.

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

Fact: While most states uphold the idea that assessed value is the same as estimated market value, this commonly is not the case. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby houses are exact examples of why this occurs.

Myth: The opinion of value of a property will differ depending upon if the appraisal is ordered for the buyer or the seller.

Fact: The appraiser has no personal interest in the result of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

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

Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. If the house were reconstructed, the dollar amount necessary to do so would be the replacement cost.

Myth: There are certain ways that appraisers use to find the cost of a house, like the price per square foot.

Fact: An appraisal is an assertion of data based on the property's size, location, proximity to specific facilities, the condition of the home and the worth of recent comparable sales. You can rely on Metro Appraisal's appraisers to be honest in assessing this information.

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

Fact: Value increase of a specific house is always concluded on an individualized basis, factoring in data on comparable properties and other relevant considerations. It makes no difference whether the economy is powerful or bad.

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

Fact: There are a multitude of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just examining the home from the outside.

Myth: Since the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the document. By the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be given one by their lending agency.

Myth: It doesn't matter to consumers what's in the report so long as it meets the needs of their lending company.

Fact: Only if consumers read a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an appraisal that could be useful to the consumer in the future, such as 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.