Appraisal myths & facts

By law, an appraiser needs to be state-licensed to offer appraisals for federally-related purchases. You also have the right to receive a copy of the finished appraisal report from your lending agency. Contact us if you have any questions about the appraisal procedure.

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

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Often when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for a good length of time, it may vary wildly.

Myth: The buyer or the seller will have leverage in the value of the house depending upon for whom the appraiser is working.

Fact: The value of the house does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the worth of the house. Obviously, he will conduct task with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: Market value should approximate replacement cost.

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a particular property, with neither being under undue influence to buy or sell. The dollar amount demanded to reconstruct a home is what constitutes the replacement cost.

Myth: Specific formulae, such as the price per square foot, are what appraisers use to come to the value of a house.

Fact: An appraisal is an amalgamation of data concluded from the home's size, location, proximity to undesirable facilities, the condition of the house and the cost of recent comparable sales. You can rely on Paradigm Appraisal Group, Inc's appraisers to be honest in assessing this data.

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

Fact: Any worth at which an appraiser arrives in regards to a particular property is always personalized, based on certain factors derived from the data of comparable properties and other specifications within the property itself. It doesn't matter if the economy is doing well or declining.

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

Fact: There are a number of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data needed.

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

Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the document. Home buyers have to be provided with a version of the document through request due to the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even worry about what the report contains so long as their lending institution is fine with the contents therein.

Fact: Only if home buyers read a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, containing helpful and often-revealing 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 proximity.