Appraisal myths & facts

Legally, an appraiser must be state certified to write legitimate appraisal reports for federally-related transactions. Also by law, you are entitled to receive a copy of the completed appraisal from your lending agency. Contact Mountain High Appraisals if you have any questions about the appraisal process.

Myth: Assessed value should be the same as to market value.

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended period.

Myth: Depending on whether the appraisal is done for the buyer or the seller, the cost of the home will vary.

Fact: The appraiser has no vested interest in the outcome of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

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

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a certain house, with neither being under pressure to buy or sell. The replacement cost is the dollar amount necessary to reconstruct a home in-kind.

Myth: Specific methods, like the price per square foot of the property, are the ways appraisers use to determine the price of a house.

Fact: An appraisal is an assertion of information based on the house's size, location, proximity to some facilities, the condition of the home and the cost of recent comparable sales. You can rely on Mountain High Appraisals's staff to be professional in assessing this information.

Myth: When the economy is robust and the worth of properties are reported to be increasing by a certain percentage, the other houses in the vicinity can be expected to rise based on that same percentage.

Fact: Value appreciation of a specific house has to be determined on an individualized basis, factoring in data on comparable homes and other relevant considerations. It doesn't matter if the economy is on the rise or declining.

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Myth: The property's outside is determinate of the actual price of the home; there is no need to do an interior inspection.

Fact: House value is determined by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found just by looking at the property from the outside.

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

Fact: Legally, the report is owned by the lending company unless the lender releases their interest in the document. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be given it by their lending company.

Myth: There's no point for consumers to even worry about what the report contains so long as their lending company is fine with the contents therein.

Fact: Only if consumers read a copy of their appraisal can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, filled with helpful and often-revealing information - 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 vicinity.

Myth: The only reason someone would order an appraisal is if a home needs its worth estimated in a lender sales transaction.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: You don't have to get an appraisal if you have had a home inspection.

Fact: Appraisal reports are nothing like a home inspection report. The appraiser concludes on an opinion of value in the appraisal process and resulting report. A home inspector determines the condition of the home and its major components and reports these findings.