Appraisal myths debunked

By law, an appraiser needs to be state-licensed to offer appraisals for federally-related purchases. The law entitles you to acquire a copy of your finished appraisal from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Market value must be equivocal to the assessed value of the property.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby houses are exact examples of why the price can vary.

Myth: The value of a house will be different depending upon whether the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no personal interest in the result of the appraisal report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value should be the same as replacement cost.

Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home. The dollar amount required to reconstruct a home is what shows the replacement cost.

Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the worth of a property.

Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to certain facilities, the condition of the home and the price of recent comparable sales. You can depend on Furr Appraisal Service's staff to be honest in assessing this data.

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

Fact: Cost increase of a specific house has to be determined on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. It makes no difference whether the economy is robust or poor.

Have other questions about appraisers, appraising or real estate in Benton County or Camden, TN?

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Myth: Just examining what the property looks like on its exterior gives an excellent idea of its value.

Fact: House value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data required.

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

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

Myth: Consumers need not be concerned with what is in their appraisal report so long as it satisfies the necessities of their lending agency.

Fact: It is a very good idea for home buyers to read a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing an incredible amount of data - 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 proximity.

Myth: Appraisals are ordered only to assess home values in property sales involving mortgage-lending transactions.

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

Myth: An appraisal is no different than a home inspection.

Fact: An appraisal report does not fulfill the same purpose as an inspection. The task of the appraiser is to find an opinion of value in the appraisal process and through creating the report. A home inspector assesses the condition of the house and its main components and reports these findings.

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