Appraisal myths debunked

It is mandated by law that a real estate appraiser needs to be state-licensed to create appraisals for federally-supported home purchases in North Carolina. The law allows you to receive a copy of your finished report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value generally will be equal 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 dearth of reassessment on nearby houses are excellent examples of why this occurs.

Myth: The buyer or the seller sometimes may have some pull in the value of the home depending upon for whom the appraiser is working.

Fact: The cost of the home does not affect the pay of the appraiser; due to this, the appraiser has no personal interest in the opinion of value of the house. This means that he will conduct job with impartiality and independence regardless for whom the appraisal is conducted.

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

Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a property without being under duress from any outside party to buy or sell. If the home were rebuilt, the dollar amount needed to do so would make up the replacement cost.

Myth: Appraisers use a formula, such as a certain price per square foot, to arrive at the value of a home.

Fact: There are many numerous ways that an appraiser will use to make a full analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable properties.

Myth: When the economy is on the rise and the cost of homes are found to be rising by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.

Fact: Any worth at which an appraiser arrives concerning a certain house is always personalized, based on certain factors concluded from the data of comparable properties and other specifications within the property itself. This is true in excellent economic times as well as poor.

Myth: Just seeing what the house looks like on the outside gives a good idea of its worth.

Fact: To find an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the information necessary.

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

Fact: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal. However, consumers have to be supplied with a copy of the document upon written request, through the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even worry about what the report contains so long as their lending agency is satisfied.

Fact: A home buyer should definitely read through their appraisal report; there could be some questions or some worries 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. Also, the report makes an invaluable 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 proximity.