Common myths about appraising

Legally, an appraiser has to be state certified to perform substantiated appraisal reports for federally-related sales. Also by law, you are entitled to demand a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.

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

Fact: It is possible that California, like most states, supports the suggestion that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby houses are perfect examples of why there might be a differential in price.

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

Fact: There is no personal interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is created.

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

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 influence from any outside party to purchase or sell. The dollar amount needed to reconstruct a home is what shows the replacement cost.

Myth: Specific formulae, such as the price per square foot of the property, are the ways appraisers use to ascertain the price of a house.

Fact: Appraisers make a full analysis of all factors pertaining to the worth of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: In a robust economy - when the worth of homes in a given area are found to be appreciating by a certain percentage - the values of individual homes in the vicinity can be expected to appreciate by that same percentage.

Fact: All increase of value is on a one-on-one basis, found by information on relevant considerations and the data of comparable properties. It makes no difference if the economy is good or poor.

Have other questions about appraisers, appraising or real estate in Orange County or Seal Beach, CA?

Contact Associate Appraisers of America

Myth: The property's exterior is determinate of the actual value of the property; there is no need to do an interior inspection.

Fact: To find an accurate worth beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data necessary.

Myth: Since you're the one providing the money for the appraisal report when applying for the loan to purchase or refinance your house, you own the ordered appraisal.

Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal report. Due the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be provided with it by their lending agency.

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

Fact: It is a very good idea for home buyers to look at a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its accuracy. 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 can 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.

Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending institution.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a variety of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: An appraisal report does not fulfill the same purpose as an inspection. The point of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the report. A home inspector determines the condition of the property and its major components and reports these findings.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question