Common myths about appraising

Legally, a real estate appraiser has to be state certified to perform substantiated real estate appraisals for federally-related sales. Also by law, you have the ability to request a copy of the finished appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Market value will be equivocal to the assessed value of the property.

Fact: It might be that Pennsylvania, like most states, supports the common myth that the assessed value equals the market value; however, this is not often the case. Sometimes when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller often will have an influence in the value of the house 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 appraisal report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is created.

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

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific home, with neither being under undue influence to buy or sell. Replacement value is the dollar amount needed to reconstruct a home in-kind.

Myth: Specific methods, such as the price per square foot of the property, are the ways appraisers use to arrive at the cost of a home.

Fact: There are many numerous methods that an appraiser will use to make a full investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable homes.

Myth: When the economy is doing well and the cost of properties are found to be appreciating by a certain percentage, the other properties in the area can be expected to rise based on that same percentage.

Fact: Price increase of a specific home must be determined on an individualized basis, factoring in information on comparable homes and other relevant considerations. This is true in strong economic times as well as poor.

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

Fact: House worth is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found just by examining the property from the outside.

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

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Because of the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be given it by their lender.

Myth: Consumers need not care about what is in their document so long as it meets the requirements of their lending agency.

Fact: It is a very good idea for consumers to check over a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, as it contains an incredible 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 vicinity.