Common myths about appraising

Legally, a real estate appraiser needs to be state certified to produce legitimate appraisal reports for federally-backed transactions. The law gives you the right to receive a copy of your finished appraisal report from your lender after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value should be the same as to market value.

Fact: It could be that Georgia, like most states, validates the common myth that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are perfect examples of why the price can vary.

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

Fact: The appraiser has no personal interest in the result of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

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

Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a property without being under pressure from any outside party to purchase or sell. The dollar amount necessary to reconstruct a property is what shows the replacement cost.

Myth: Certain formulae, such as the price per square foot of the property, are what appraisers use to arrive at the price of a property.

Fact: There are many numerous methods that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable homes.

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

Fact: Any cost at which an appraiser arrives in regards to a certain house is always personalized, based on certain factors pulled from the information of comparable homes and other considerations within the home itself. This is true in excellent economic times as well as poor.

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

Fact: To conclude an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. An external inspection obviously can't provide all of the information needed.

Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their property, they own their appraisal.

Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document. Consumers have to be given a copy of the document upon written request because of the Equal Credit Opportunity Act.

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

Fact: A consumer should definitely inspect their report; there might be some questions or some concerns about the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an incredible 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 vicinity.