Common myths about appraising

Legally, an appraiser has to be state certified to produce substantiated real estate appraisals for federally-supported purchase. Also by law, you have the ability to request a copy of the finished appraisal from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: The value that is ascertained by the appraiser should be equivalent to the market value.

Fact: It is possible that Indiana, like most states, validates the common myth that the assessed value is the same as the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are prime examples of why there might be a differential in price.

Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the opinion of value of the house will vary.

Fact: The appraiser has no vested 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: The replacement cost of the house should be is on par with the market value.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain property, with neither being under pressure to buy or sell. If the house were rebuilt, the dollar amount required to do so would be the replacement cost.

Myth: There are certain ways that appraisers use to show the value of a home, such as the price per square foot.

Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent costs of comparable homes.

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

Fact: Any cost at which an appraiser concludes in regards to a specific house is always personalized, based on certain factors pulled from the information of comparable properties and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.

Myth: Just seeing what the property looks like on the outside gives an idea of its value.

Fact: Property worth is determined by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just inspecting the home from the exterior.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their home, they legally own their appraisal.

Fact: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the report. However, consumers must be provided with a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.

Myth: There's no need for home buyers to even care about what the report contains so long as their lending agency is satisfied.

Fact: It is a very good idea for home buyers to read a copy of their appraisal so that they can double-check the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, comprised of helpful 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 vicinity.