Common myths about appraising

It is required by legal agencies that an appraiser is required to be state-licensed to create appraisal reports for federally-supported real estate purchases in Pennsylvania. The law allows you to acquire a copy of your finished appraisal from your lender after it has been produced. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value will always equate to market value.

Fact: While most states support the concept that assessed value is equal to estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an extended time.

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

Fact: The price of the house does not affect the payment of the appraiser; because of this, the appraiser has no pressured interest in the worth of the house. What this means is he will conduct services with impartiality and objectivity regardless for whom the appraisal is provided.

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

Fact: Without any pressure from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house. If the home were reconstructed, the dollar amount needed to do so would make up the replacement cost.

Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the value of a house.

Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.

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

Fact: Value appreciation of a specific property must be concluded on an individualized basis, factoring in data on comparable homes and other relevant considerations. It makes no difference if the economy is good or terrible.

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

Fact: To find an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. As you can see, none of these things can be derived simply by viewing 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 house, you own the produced appraisal report.

Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. Consumers have to be supplied with a version of the document upon written request due to the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the report so long as it satisfies the needs of their lender.

Fact: It is very important for home buyers to check over a copy of their report so that they can verify the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an appraisal report that could be useful to the consumer 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 area.