Appraisal myths & facts

Legally, an appraiser must be state certified to perform substantiated appraisal reports for federally-related sales. You also have the right to acquire a copy of the finished report from your lending agency. Contact O'Neil & Company Appraisal Service if you have any concerns about the appraisal procedure.

Myth: Market value has to be the same as the assessed value of the property.

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

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

Fact: The value of the home does not affect the payment of the appraiser; due to this, the appraiser has no pressured interest in the worth of the house. Obviously, he will conduct business with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: Market value will equate to replacement cost.

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. If the home were rebuilt, the dollar amount required to do so would form the replacement cost.

Myth: There are certain ways that real estate appraisers use to determine the cost of a property, like the price per square foot.

Fact: An appraisal report is an amalgamation of data based on the home's size, location, proximity to some facilities, the condition of the house and the cost of recent comparable sales. You can depend on O'Neil & Company Appraisal Service's staff to be ethical in assessing this information.

Myth: In a strong economy - when the prices of homes in a given region are found to be increasing by a certain percentage - the prices of individual homes in the proximity can be expected to appreciate by that same percentage.

Fact: Cost appreciation of a certain house has to be determined on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. It doesn't matter if the economy is doing well or declining.

Myth: The home's outside is determinate of the actual value of the property; it is unnecessary to do an interior appraisal.

Fact: To find an accurate price beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. An outside-only inspection certainly can't provide all of the data needed.

Myth: Since the consumer is the party who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: Legally, the document is owned by the lending agency unless the lender releases their interest in the document. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be provided with it by their lender.

Myth: It doesn't matter to consumers what's in the report so long as it satisfies the needs of their lending company.

Fact: It is a very good idea for consumers to check over a copy of their appraisal so that they can double-check the accuracy of the document, in case they need to question its veracity. 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 a great deal 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 vicinity.