Appraisal myths debunked

Legally, an appraiser must be state certified to perform legitimate appraisal reports for federally-backed purchase. Also by law, you are entitled to request a copy of the completed report from your lender. Contact Nader Appraisal Services if you have any concerns about the appraisal process.

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

Fact: While most states support the idea that assessed value is the same as estimated market value, this commonly is not the case. Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby homes are perfect examples of why the price can vary.

Myth: The opinion of value of a house will vary depending upon if the appraisal is ordered for the buyer or the seller.

Fact: The appraiser has no personal interest in the result of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

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

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. The dollar amount required to reconstruct a property is what constitutes the replacement cost.

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

Fact: An appraisal report is a collection of data based on the property's size, location, proximity to certain facilities, the condition of the property and the value of recent comparable sales. You can rely on Nader Appraisal Services's staff to be honest in assessing this data.

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

Fact: Cost increase of a specific house is always concluded on an individualized basis, factoring in information on comparable houses and other relevant elements. This is true in excellent economic times as well as poor.

Myth: You can commonly see what a property is worth simply by looking at the exterior.

Fact: There are a multitude of different variables that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data required.

Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your house, you own the provided appraisal report.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Under the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be given it by their lending company.

Myth: It doesn't matter to consumers what's in the report so long as it meets the requirements of their lending agency.

Fact: Only if consumers examine 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. Also, the appraisal report makes a valuable record for future reference, comprised of useful and often-revealing 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 vicinity.