Appraisal myths & facts

It is enforced by law that an appraiser must be state-licensed to write appraisal reports for federally-related real estate purchases in Florida. Also by law, you are entitled to demand a copy of the completed report from your lender. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value generally will be similar to to market value.

Fact: While most states back the suggestion that assessed value is equal to estimated market value, this commonly is not the case. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby homes are excellent examples of why there might be a differential in price.

Myth: The buyer or the seller will have an influence in the value of the property depending upon for whom the appraiser is working.

Fact: The appraised value of the home does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the cost of the home. This means that he will provide job with impartiality and independence regardless for whom the appraisal is provided.

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

Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a home without being under duress from any outside party to buy or sell. Replacement cost is the dollar amount required to reconstruct a home in-kind.

Myth: There are specific ways that real estate appraisers use to show the cost of a home, such as the price per square foot.

Fact: There are many different methods that an appraiser will use to make a detailed investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable homes.

Myth: When the economy is strong and the worth of properties are reported to be increasing by a certain percentage, the other homes in the area can be expected to appreciate based on that same percentage.

Fact: Price increase of a specific house is always concluded on an individualized basis, factoring in data on comparable homes and other relevant specifications within the house itself. This is true in excellent economic times as well as bad.

Myth: Just seeing what the property looks like on the outside gives an idea of its worth.

Fact: Property worth is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by looking at the home from the outside.

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

Fact: Legally, the document is owned by the lending agency unless the lender releases their interest in the document. Home buyers have to be supplied with a version of the appraisal report through request because of 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 company.

Fact: Only if consumers 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, since it contains an exorbitant amount of information - 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.