Appraisal myths debunked

It is enforced by the government that a real estate appraiser needs to be state-licensed to perform appraisals for federally-related home sales in Tennessee. Also by law, you are allowed to request a copy of the completed report from your lending agency. Contact Furr Appraisal Service if you have any concerns about the appraisal procedure.

Myth: Market value must be the same as the assessed value of the property.

Fact: While most states uphold the suggestion that assessed value equates estimated market value, this generally is not the case. At times when interior remodeling has been done and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: The buyer or the seller can have leverage in the cost of the property depending upon for whom the appraiser is working.

Fact: The cost of the home does not affect the pay of the appraiser; as such, the appraiser has no vested interest in the cost of the property. Obviously, he will complete his task with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Any time market value is established, it should be similar to the replacement cost of the house.

Fact: Market value is based on what a willing buyer would likely pay a willing seller for a specific house, with neither being under undue influence to buy or sell. If the property were reconstructed, the dollar amount necessary to do so would make up the replacement cost.

Myth: There are specific ways that real estate appraisers use to determine the value of a house, such as the price per square foot.

Fact: There are many numerous ways that an appraiser will use to make an in-depth analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the cost of recently sold comparable houses.

Myth: In a powerful economy - when the values of homes in a given neighborhood are found to be appreciating by a particular percentage - the costs of individual properties in the vicinity can be expected to rise by that same percentage.

Fact: All appreciation of price is on a one-on-one basis, found by data on relevant elements and the data of comparable properties. It makes no difference whether the economy is good or on the decline.

Myth: The home's exterior is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.

Fact: Property worth is determined by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the information necessary.

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

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. However, consumers have to be supplied with a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the necessities of their lending agency.

Fact: A home buyer should definitely look through their appraisal; there could be some questions or some concerns with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal report that should 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 region.