Appraisal myths debunked

Legally, a real estate appraiser needs to be state certified to create legitimate appraisal reports for federally-related sales. You are also entitled by law to request a copy of the finished appraisal report from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value will always be equal to market value.

Fact: It is probable that Colorado, like most states, supports the suggestion that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are exact examples of why the price can vary.

Myth: Depending on if the appraisal is done for the buyer or the seller, the value of the property will vary.

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

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

Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement cost is the dollar amount required to rebuild a home in-kind.

Myth: There are specific methods that real estate appraisers use to show the value of a home, like the price per square foot.

Fact: There are many different calculations that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable homes.

Myth: As homes increase their worth by a specific percentage - in a robust economy - the properties nearby are figured to increase by the same amount.

Fact: Any price at which an appraiser concludes in regards to a certain house is always personalized, based on certain factors concluded from the information of comparable homes and other considerations within the house itself. It makes no difference if the economy is excellent or on the decline.

Myth: You can usually find what a home is worth simply by looking at the outside.

Fact: Property value is concluded by a number of factors, including location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived just by looking at the home from the outside.

Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their house, they own their appraisal report.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that ordered the appraisal. However, home buyers must be provided with a copy of the report upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the necessities of their lending company.

Fact: A consumer should definitely inspect their document; there could be some questions or some worries with the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, as it contains an exorbitant amount 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 proximity.