Appraisal myths debunked

It is enforced by legal agencies that an appraiser is required to be state-licensed to offer appraisals for federally-supported property purchases in Alaska. Also by law, you have the right to demand a copy of the finished appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

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

Fact: While most states back the suggestion that assessed value is equal to estimated market value, this commonly is not the case. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.

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

Fact: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is created.

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

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

Myth: There are specific methods that real estate appraisers use to determine the cost of a home, such as the price per square foot.

Fact: There are many varied calculations that an appraiser will use to make a comprehensive analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable houses.

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

Fact: Price appreciation of a specific house is always concluded on an individualized basis, factoring in data on comparable properties and other relevant elements. It doesn't matter if the economy is doing well or declining.

Myth: You can often tell what a property is worth simply by looking at the outside.

Fact: To determine an accurate value beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply inspecting the property from the exterior.

Myth: Since you're the one providing the money for the appraisal report when applying for your loan to buy or refinance your house, you own the provided appraisal.

Fact: Legally, the appraisal report is owned by the lender unless the lender releases their interest in the report. However, consumers have to be supplied with a copy of the document upon written request, due to the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it meets the needs of their lender.

Fact: A consumer should definitely read through their appraisal report; there may be some questions or some worries with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an report that will probably be useful to the home buyer 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 region.