Common myths about appraising

Legally, a real estate appraiser must be state certified to perform substantiated real estate appraisals for federally-related transactions. Also by law, you are entitled to receive a copy of the completed appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Assessed value will always be equal to market value.

Fact: It might be that Alabama, like most states, validates the common myth that the assessed value equals the market value; however, this certainly varies based on state-to-state. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an prolonged period of time.

Myth: The appraised value of a home will vary depending upon whether the appraisal is provided for the buyer or the seller.

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

Myth: Market value will equate to replacement cost.

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside party to buy or sell. The dollar amount required to reconstruct a house is what forms the replacement cost.

Myth: Appraisers use a formula, such as a specific price per square foot, to arrive at the value of a home.

Fact: An appraisal is a collection of information concluded from the property's size, location, proximity to some facilities, the condition of the house and the worth of recent comparable sales. You can count on Mike Noble Appraisals's appraisers to be honest in assessing this information.

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

Fact: Value appreciation of a certain property must be concluded on an individualized basis, factoring in information on comparable properties and other relevant considerations. It doesn't matter if the economy is on the rise or declining.

Myth: The house's exterior is determinate of the actual worth of the property; there is no need to do an interior inspection.

Fact: To determine an accurate worth beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just examining the house from the exterior.

Myth: Because the consumer is the party who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be given one by their lending company.

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

Fact: It is a very good idea for consumers to peruse a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, filled with useful and often-revealing data - including 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.