Appraisal myths debunked

It is mandated by the government that a real estate appraiser must be state-licensed to perform appraisal reports for federally-related property transactions in Connecticut. You are also entitled by law to request a copy of the finished appraisal from your lending agency. Contact us if you have any concerns about the appraisal process.

Myth: Market value needs to be equivocal to the assessed value of the property.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby properties are perfect examples of why this occurs.

Myth: The buyer or the seller will have leverage in the cost of the house depending upon for whom the appraiser is working.

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

Myth: The replacement value of the house is always is on par with the market value.

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a particular property, with neither being under pressure to buy or sell. The dollar amount required to rebuild a home is what shows the replacement cost.

Myth: There are specific ways that appraisers use to find the opinion of value of a house, such as the price per square foot.

Fact: There are many different methods that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable properties.

Myth: When the economy is robust and the worth of homes are reported to be rising by a certain percentage, the other properties in the neighborhood can be expected to rise based on that same percentage.

Fact: Cost appreciation of a certain home has to be determined on an individualized basis, factoring in information on comparable properties and other relevant specifications within the house itself. This is true in good economic times as well as poor.

Myth: The property's exterior is determinate of the actual worth of the house; it is unnecessary to do an interior inspection.

Fact: Home worth is concluded by a number of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived just by inspecting the property from the exterior.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, they legally own their appraisal report.

Fact: Legally, the report is owned by the lender unless the lender releases their interest in the report. However, home buyers must be provided with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even care about what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: Only if consumers look at a copy of their appraisal report can they ensure 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 report makes a near perfect record for future reference, containing helpful 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 proximity.