Appraisal myths & facts

Legally, a real estate appraiser has to be state certified to create substantiated real estate appraisals for federally-supported purchase. The law gives you the right to get a copy of your completed appraisal report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal procedure.

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

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended time.

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

Fact: The opinion of value of the house does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the value of the property. This means that he will conduct task with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Market value will approximate replacement cost.

Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a property without being under influence from any external group to purchase or sell. Replacement cost is the dollar amount necessary to rebuild a property in-kind.

Myth: There are certain ways that appraisers use to show the value of a house, like the price per square foot.

Fact: An appraisal report is a collection of data based on the home's size, location, proximity to specific facilities, the condition of the property and the value of recent comparable sales. You can depend on Michael J. Ganguzza's appraisers to be ethical in assessing this information.

Myth: When the economy is doing well and the value of properties are found to be rising by a certain percentage, the other houses in the neighborhood can be expected to increase based on that same percentage.

Fact: All appreciation of value is on an individual basis, determined by data on relevant conditions and the data of comparable houses. This is true in fair economic times as well as poor.

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

Fact: Home worth is determined by a number of factors, including area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the information required.

Myth: Since you're the one paying for the appraisal when applying for your loan to buy or refinance real estate, you own the provided appraisal.

Fact: Legally, the appraisal report is owned by the lending agency unless the lender releases their interest in the report. Home buyers have to be provided with a copy of the appraisal report through request as per the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even care about what the appraisal report contains so long as their lender is satisfied.

Fact: A consumer should definitely read through their appraisal; there will probably be some questions or some concerns about 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 a wealth of data stored in an appraisal report that can be useful to the home buyer 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 proximity.