Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-related purchases. You also have the right to request a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Market value will be the same as the assessed value of the property.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are exact examples of why there might be a differential in price.

Myth: The buyer or the seller sometimes may have an influence in the value of the house depending upon for whom the appraiser is working.

Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is ordered.

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

Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house. If the property were rebuilt, the dollar amount needed to do so would be the replacement cost.

Myth: Certain methods, like the price per square foot, are the ways appraisers use to arrive at the worth of a home.

Fact: An appraisal report is an assertion of information concluded from the home's size, location, proximity to specific facilities, the condition of the home and the value of recent comparable sales. You can depend on Tim Norris & Associates's staff to be forthright in assessing this information.

Myth: When the economy is strong and the sales prices of houses are found to be rising by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.

Fact: Cost increase of a specific house has to be determined on a case-by-case basis, factoring in information on comparable houses and other relevant considerations. This is true in strong economic times as well as poor.

Have other questions about appraisers, appraising or real estate in Allen County or Huntertown, IN?

Contact Tim Norris & Associates

Myth: You can commonly find what a house is worth simply by looking at the exterior.

Fact: There are a multitude of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply looking at the property from the outside.

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

Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document. Consumers have to be given a copy of the report through request due to the Equal Credit Opportunity Act.

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

Fact: It is almost imperative for home buyers to go through a copy of their appraisal so that they can verify the accuracy of the document, in case it's required to question its veracity. 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, as it contains an exorbitant amount of information - including, but certainly 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: Appraisers are hired only to estimate building values in home sales involving mortgage-lending deals.

Fact: Based upon their qualifications and designations, appraisers can and do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: An appraisal report is the same as a home inspection report.

Fact: Appraisal reports are definitely not the same as a home inspection report. The point of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector assesses the condition of the house and its major components and reports their findings.