Appraisal myths & facts

It is enforced by law that an appraiser must be state-licensed to offer appraisals for federally-related home purchases in Florida. The law gives you the right to get a copy of your finished appraisal report from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal process.

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

Fact: While most states uphold the concept that assessed value equates estimated market value, this commonly is not the case. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are perfect examples of why there might be a differential in price.

Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the opinion of value of the house will vary.

Fact: The opinion of value of the property does not affect the salary of the appraiser; as a result, the appraiser has no pressured interest in the value of the home. What this means is he will render services with impartiality and independence regardless for whom the appraisal is created.

Myth: Market value should equate to replacement cost.

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. If the house were reconstructed, the dollar amount needed to do so would make up the replacement cost.

Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the cost of a house.

Fact: There are many varied processes that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable homes.

Myth: When the economy is doing well and the cost of houses are reported to be rising by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.

Fact: Any worth at which an appraiser concludes in regards to a particular property is always individualized, based on certain factors concluded from the information of comparable properties and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.

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

Fact: To determine an accurate worth beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these things can be derived simply by inspecting the property from the outside.

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

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

Myth: There's no need for consumers to even concern themselves with what the appraisal report contains so long as their lending institution is satisfied.

Fact: Only if home buyers read a copy of their appraisal report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, containing an exorbitant amount of data - 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.