Common myths about appraising

It is mandated by law that an appraiser must be state-licensed to offer appraisal reports for federally-related property sales in Florida. Also by law, you have the right to receive a copy of the finished appraisal from your lender. Contact us if you have any concerns about the appraisal procedure.

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

Fact: While most states support the concept that assessed value approximates estimated market value, this commonly is not the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged period of time.

Myth: The appraised value of a house will vary depending upon if the appraisal is conducted for the buyer or the seller.

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

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

Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under pressure from any outside group to purchase or sell. Replacement value is the dollar amount required to rebuild a property in-kind.

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

Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the cost of a home, including its location, condition, size, proximity to facilities and recent costs of comparable homes.

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

Fact: All increase of worth is on an individual basis, found by information on relevant elements and the data of comparable properties. It makes no difference if the economy is strong or bad.

Myth: You can often find what a house is worth simply by looking at the outside.

Fact: To find an accurate price beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information required.

Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their home, they legally own their appraisal report.

Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the appraisal. Consumers must be given a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their report so long as it satisfies the necessities of their lending institution.

Fact: Only if consumers examine a copy of their 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. Also, the report makes a valuable record for future reference, filled with 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 area.