Common myths about appraising

Legally, an appraiser is required to be state certified to produce substantiated appraisal reports for federally-related sales. Also by law, you are allowed to request a copy of the finished appraisal from your lending agency. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value should equate to market value.

Fact: While most states back the idea that assessed value is equal to estimated market value, this usually is not the case. At times when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller may have impact in the value of the home depending upon for whom the appraiser is working.

Fact: The cost of the home does not affect the pay of the appraiser; as such, the appraiser has no personal interest in the opinion of value of the property. This means that he will conduct job with impartiality and objectivity regardless for whom the appraisal is created.

Myth: Market value should equal replacement cost.

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a home without being under duress from any external group to purchase or sell. The dollar amount necessary to reconstruct a home is what forms the replacement cost.

Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the cost of a house.

Fact: An appraisal is a collection of data based on the house's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can count on Premier Appraisals, Inc.'s staff to be ethical in assessing this data.

Myth: As properties appreciate by a certain percentage - in a strong economy - the homes in proximity are figured to increase by the same amount.

Fact: Value appreciation of a certain property must be determined on a case-by-case basis, factoring in information on comparable homes and other relevant considerations. It doesn't matter if the economy is doing well or declining.

Myth: The house's exterior is determinate of the actual worth of the home; it is unnecessary 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 things can be derived simply by looking at the home from the exterior.

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

Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. By the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be given one 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 company is satisfied.

Fact: Only if consumers examine a copy of their appraisal 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. An report can serve as a record for the future, containing an incredible amount of information - 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.