Common myths about appraising

Legally, an appraiser is required to be state certified to produce substantiated appraisal reports for federally-supported purchase. You are also entitled by law to acquire a copy of the finished appraisal report from your lender. Contact us if you have any questions about the appraisal process.

Myth: Market value should be the same as the assessed value of the property.

Fact: It is probable that North Carolina, like most states, validates the suggestion that the assessed value is no different from the market value; however, this is not always true. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an extended period of time.

Myth: The value of a home will differ depending upon if the appraisal is produced for the buyer or the seller.

Fact: The price of the property does not affect the salary of the appraiser; as a result, the appraiser has no pressured interest in the value of the property. This means that he will provide task with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: Any time market value is established, it should equate to the replacement cost of the house.

Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a home without being under influence from any outside party to buy or sell. If the house were reconstructed, the dollar amount needed to do so would make up the replacement cost.

Myth: Appraisers use a formula, such as a certain price per square foot, to come to the cost of a house.

Fact: Appraisers complete a full analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent worth of comparable homes.

Myth: When the economy is on the rise and the sales prices of houses are reported to be rising by a certain percentage, the other properties in the neighborhood can be expected to rise based on that same percentage.

Fact: Any value at which an appraiser arrives in regards to a particular home is always personalized, based on certain factors pulled from the data of comparable properties and other specifications within the property itself. It makes no difference if the economy is robust or on the decline.

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

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

Myth: Since the consumer is the party who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. However, consumers have to be supplied with a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even worry about what the appraisal report contains so long as their lender is satisfied.

Fact: Only if home buyers read a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing an incredible amount of data - including, but 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 area.

Myth: The only reason someone would order an appraisal is if a house needs its worth assessed in a lender-based sales transaction.

Fact: Based upon their qualifications and designations, appraisers can and will provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

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

Fact: Appraisal reports are completely different than a home inspection report. The appraiser finds an opinion of value in the appraisal process and resulting report. The job of a home inspector is to assess the condition of the home and its major components, then write a report on their findings.