Appraisal myths debunked

It is mandated by legal agencies that an appraiser must be state-licensed to offer appraisals for federally-supported property sales in Massachusetts. The law entitles you to receive a copy of your finished appraisal report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value should always be similar to to market value.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. At times when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the East Dennis have not been reassessed for a good length of time, it may vary wildly.

Myth: The appraised value of a home will vary depending upon if the appraisal is conducted for the buyer or the seller.

Fact: The appraiser has no personal interest in the outcome of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

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

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

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

Fact: There are many different processes that an appraiser will use to make an in-depth analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable houses.

Myth: When the economy is strong and the worth of houses are found to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to increase based on that same percentage.

Fact: All appreciation of value is on a one-on-one basis, found by data on relevant considerations and the data of comparable houses. This is true in good economic times as well as poor.

Myth: Just examining what the property looks like on its exterior gives a good idea of its value.

Fact: There are a multitude of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by viewing the house from the outside.

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

Fact: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, home buyers must be supplied with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even concern themselves with what the appraisal report contains so long as their lender is fine with the contents therein.

Fact: A home buyer should definitely read through their appraisal; there might be some questions or some concerns with the accuracy of the appraisal report that need to be addressed. 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, containing a great deal of information - 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.