Appraisal myths & facts

Legally, an appraiser has to be state certified to create legitimate real estate appraisals for federally-related transactions. The law allows you to receive a copy of your completed report from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal process.

Myth: The value that is assessed by the appraiser must be equivalent to the market value.

Fact: It is possible that Indiana, like most states, validates the suggestion that the assessed value equates to the market value; however, this is not often the case. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby homes are excellent examples of why this occurs.

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

Fact: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is ordered.

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

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific house, with neither being under pressure to buy or sell. The dollar amount necessary to reconstruct a house is what shows the replacement cost.

Myth: Specific methods, like the price per square foot of the property, are what appraisers use to arrive at the value of a home.

Fact: There are many numerous calculations that an appraiser will use to make a comprehensive investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable houses.

Myth: In a strong economy - when the costs of homes in a given region are reported to be increasing by a certain percentage - the worth of individual properties in the vicinity can be expected to increase by that same percentage.

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

Myth: The home's exterior is determinate of the actual price of the house; there is no need to do an interior appraisal.

Fact: There are a multitude of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by examining the home from the exterior.

Myth: Because the consumer is the person who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.

Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with it by their lending company.

Myth: There's no reason for consumers to even worry about what the appraisal report contains so long as their lending agency is satisfied.

Fact: It is almost imperative for home buyers to go through a copy of their report so that they can double-check the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained 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 region.