Appraisal myths & facts

Legally, a real estate appraiser has to be state certified to perform substantiated real estate appraisals for federally-backed transactions. You are also entitled by law to acquire a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser will be exactly the same as the market value.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. At times when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the Metairie have not been reassessed for quite some time, it may vary wildly.

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

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

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

Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a home without being under influence from any external party to buy or sell. Replacement cost is the dollar amount necessary to rebuild a house in-kind.

Myth: Appraisers use a calculation, like a specific price per square foot, to come to the worth of a home.

Fact: Appraisers complete a detailed analysis of all factors in consideration to the price of a home, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: As properties increase their worth by a certain percentage - in a robust economy - the houses within the same neighborhood are expected to appreciate by the same amount.

Fact: Value increase of a specific home is always determined on an individualized basis, factoring in information on comparable properties and other relevant specifications within the property itself. This is true in good economic times as well as poor.

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

Fact: There are a number of different factors that conclude property value; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the information required.

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

Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. Home buyers have to be supplied with a copy of the report through request because of the Equal Credit Opportunity Act.

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

Fact: A consumer should definitely look through their appraisal report; there might be some questions or some concerns with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, since it contains an exorbitant amount of 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 area.

Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending institution.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: You shouldn't need to get an appraisal if you order a home inspection.

Fact: A home inspection report has a completely different purpose than an appraisal. The function of an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. The task of a home inspector is to find the condition of the home and its main components, then create a report on their conclusions.