Appraisal myths & facts

Legally, a real estate appraiser must be state certified to write legitimate real estate appraisals for federally-backed sales. You have the ability to acquire a copy of the finished report from your lender. Contact Palma-Lazar Appraisal if you have any questions about the appraisal process.

Myth: Market value has to be equivocal to the assessed value of the property.

Fact: It might be that Pennsylvania, like most states, validates the idea that the assessed value equals the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are exact examples of why the price can vary.

Myth: The buyer or the seller sometimes may have impact in the value of the home depending upon for whom the appraiser is working.

Fact: The appraiser has no vested interest in the result of the appraisal report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value should be the same as replacement cost.

Fact: Market value is based on what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell. The replacement cost is the dollar amount required to rebuild a home in-kind.

Myth: Appraisers use a formula, like a certain price per square foot, to figure out the value of a home.

Fact: There are many differing processes that an appraiser will use to make a full investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable houses.

Myth: When the economy is on the rise and the cost of properties are reported to be increasing by a certain percentage, the other homes in the proximity can be expected to rise based on that same percentage.

Fact: All increase of price is on a one-on-one basis, concluded by data on relevant elements and the data of comparable houses. It doesn't matter if the economy is doing well or declining.

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

Fact: There are a number of different factors that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found simply by examining the house from the exterior.

Myth: Considering that the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

Fact: The document is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report. However, consumers must be provided with a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.

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

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