Common myths about appraising

By law, an appraiser must be state-licensed to produce appraisals for federally-supported sales. You have the ability to acquire a copy of the finished appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.

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

Fact: It is probable that Tennessee, like most states, validates the common myth that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. There are 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 years or more, it may vary wildly.

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

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

Myth: The replacement cost of the property will be is on par with the market value.

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 external party to buy or sell. The dollar amount necessary to rebuild a house is what shows the replacement cost.

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

Fact: Appraisers complete a detailed analysis of all factors pertaining to the price of a home, including its location, condition, size, proximity to facilities and recent values of comparable houses.

Myth: In a robust economy - when the sales prices of homes in a given area are found to be increasing by a certain percentage - the worth of individual properties in the proximity can be expected to appreciate by that same percentage.

Fact: Worth increase of a specific house is always concluded on a case-by-case basis, factoring in data on comparable homes and other relevant considerations. This is true in fair economic times as well as poor.

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

Fact: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just viewing the property from the exterior.

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

Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, home buyers must be given a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.

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

Fact: A consumer should definitely read through their appraisal report; there will probably be some questions or some concerns about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent 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.