Fact: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality
Assumption: Appraisers are hired only to estimate real estate property values in property sales involving mortgage-lending transactions.
Fact:
Depending upon their qualifications and designations, appraisers can
and do provide a variety of services, including advice for estate
planning, dispute resolution, zoning and tax assessment review and
cost/benefit analysis.
Assumption: Market value should approximate replacement cost.
Fact:
Market value is based on what a willing buyer likely would pay a
willing seller for a particular property, with neither being under
pressure to buy or sell. Replacement cost is the dollar amount required
to reconstruct a property in-kind.
Assumption: Assessed value should equate to market value.
Fact:
While most states support the concept that assessed value approximate
estimated market value, this often is not the case. Examples include
when interior remodeling has occurred and the assessor is unaware of
the improvements, or when properties in the vicinity have not been
reassessed for an extended period.
Assumption: Appraisers use a formula, such as a specific price per square foot, to figure out the value of a home.
Fact:
Appraisers make a detailed analysis of all factors pertaining to the
value of a home including its location, condition, size, proximity to
facilities and recent sale prices of comparable properties in the
subject market area.
Assumption: Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they own their appraisal.
Fact:
The appraisal is, in fact, legally owned by the lender - unless the
lender "releases its interest" in the document. However, consumers may
obtain a copy of the appraisal report from their lender who had ordered
the report under the Equal Credit Opportunity Act.
Assumption: Appraisers are hired only to estimate real estate property values in property sales involving mortgage-lending transactions.
Fact:
Depending upon their qualifications and designations, appraisers can
and do provide a variety of services, including advice for estate
planning, dispute resolution, zoning and tax assessment review, PMI
removal and cost/benefit analysis.
Assumption: In a robust economy - when the sales prices of
homes in a given area are reported to be rising by a particular
percentage - the value of individual properties in the area can be
expected to appreciate by that same percentage.
Fact: Value
appreciation of a specific property must be determined on an
individualized basis, factoring in data on comparable properties and
other relevant considerations. This is true in good times as well as
bad.
Assumption: Consumers need not be concerned with what is in
the appraisal document so long as it satisfies the needs of their
lending institution.
Fact: Only if consumers read a copy of
their appraisal can they double-check its accuracy and question the
result. Also, it makes a valuable record for future reference,
containing useful and often-revealing information - including 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 vicinity.
Assumption: An Appraisal is the same as a home inspection.
Fact: An Appraisal does not serve the same purpose as an inspection. The Appraiser forms an opinion of value in the Appraisal process and resulting report. A home inspector determines the condition of the home and its major components and reports these findings
Assumption: You generally can tell what a property is worth simply by looking at the outside.
Fact:
Property value is determined by a number of factors, including
location, condition, improvements, amenities, and market trends.