Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-supported purchases. You are also entitled by law to receive a copy of the finished appraisal report from your lender. Contact Island House Appraisals Inc if you have any concerns about the appraisal process.

Myth: Assessed value should be equal to market value.

Fact: It is probable that Florida, like most states, validates the idea that the assessed value is the same as the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are exact examples of why there might be a differential in price.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the cost of the home will vary.

Fact: The cost of the house does not affect the pay of the appraiser; because of this, the appraiser has no vested interest in the opinion of value of the house. What this means is he will provide job with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: Any time market value is established, it should equate to the replacement cost of the property.

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any outside group to buy or sell. The dollar amount demanded to reconstruct a home is what constitutes the replacement cost.

Myth: Appraisers use a formula, such as a certain price per square foot, to come to the cost of a property.

Fact: An appraisal is an assertion of data based on the home's size, location, proximity to undesirable facilities, the condition of the house and the price of recent comparable sales. You can rely on Island House Appraisals Inc's staff to be forthright in assessing this information.

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

Fact: All appreciation of value is on a case-by-case basis, concluded by information on relevant considerations and the data of comparable homes. This is true in excellent economic times as well as poor.

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

Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. An exterior inspection obviously can't provide all of the data required.

Myth: Considering that the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.

Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. However, home buyers must be given a copy of the report upon written request, due to the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their report so long as it exceeds the needs of their lending company.

Fact: A home buyer should definitely look through their document; there may be some questions or some concerns with 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 great deal of information contained in an appraisal report that can be useful to the consumer 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 vicinity.