Appraisal myths debunked

It is mandated by legal agencies that an appraiser must be state-licensed to offer appraisal reports for federally-supported real estate sales in North Carolina. Also by law, you are allowed to receive a copy of the completed report from your lender. Contact us if you have any questions about the appraisal process.

Myth: Assessed value will always equate to market value.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the cost of the house will vary.

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

Myth: Market value should equal replacement cost.

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

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

Fact: An appraisal is an assertion of information based on the house's size, location, proximity to undesirable facilities, the condition of the home and the worth of recent comparable sales. You can rely on James Earp Appraisal Service's staff to be professional in assessing this data.

Myth: In a robust economy - when the values of properties in a given county are found to be increasing by a particular percentage - the worth of individual properties in the vicinity can be expected to rise by that same percentage.

Fact: Worth appreciation of a specific house must be concluded on an individualized basis, factoring in data on comparable properties and other relevant considerations. This is true in excellent economic times as well as poor.

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

Fact: To determine an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. An exterior inspection definitely can't provide all of the data needed.

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

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending agency that purchased the appraisal. However, consumers must be provided with a copy of the report upon written request, due to the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their appraisal document so long as it exceeds the requirements of their lending group.

Fact: A home buyer should definitely read through their document; there will probably be some questions or some worries about the accuracy of the report that must 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, containing a great deal of data - including, but certainly 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.