Appraisal myths & facts

Legally, an appraiser needs to be state certified to create legitimate appraisal reports for federally-backed transactions. You also have the right to receive a copy of the completed report from your lender. Contact Premier Appraisals, Inc. if you have any concerns about the appraisal procedure.

Myth: Assessed value will always equate to market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby properties are perfect examples of why this occurs.

Myth: The buyer or the seller often will have some pull in the value of the home depending upon for whom the appraiser is working.

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

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

Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a home without being under influence from any external group to purchase or sell. The dollar amount required to reconstruct a home is what constitutes the replacement cost.

Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the cost of a property.

Fact: An appraisal is a collection of information based on the house's size, location, proximity to certain facilities, the condition of the house and the cost of recent comparable sales. You can rely on Premier Appraisals, Inc.'s appraisers to be ethical in assessing this data.

Myth: As homes appreciate by a specific percentage - in a strong economy - the houses around the appreciating properties are figured to increase by the same amount.

Fact: Worth increase of a specific property has to be determined on an individualized basis, factoring in information on comparable homes and other relevant specifications within the property itself. It makes no difference if the economy is powerful or bad.

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

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

Myth: Since you're the one paying for the appraisal report when applying for the loan to buy or refinance your home, you own the ordered appraisal report.

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that ordered the appraisal. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be provided with one by their lending company.

Myth: Home buyers need not be concerned with what is in their appraisal report so long as it exceeds the necessities of their lending group.

Fact: Only if home buyers look at a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an report that should be useful to the home buyer in the future, such as 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 region.