Appraisal myths debunked

Legally, a real estate appraiser is required to be state certified to produce legitimate real estate appraisals for federally-backed transactions. The law entitles you to receive a copy of your finished appraisal report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

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

Fact: It could be that California, like most states, supports the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.

Myth: The buyer or the seller sometimes may have an influence in the cost of the house depending upon for whom the appraiser is working.

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

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

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under undue influence to buy or sell. If the property were rebuilt, the dollar amount needed to do so would set the replacement cost.

Myth: Specific formulae, such as the price per square foot, are the methods appraisers use to determine the cost of a home.

Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to certain facilities, the condition of the house and the value of recent comparable sales. You can count on Barton J. Vogel's staff to be professional in assessing this data.

Myth: In a strong economy - when the values of properties in a given area are found to be appreciating by a certain percentage - the prices of individual properties in the vicinity can be expected to rise by that same percentage.

Fact: Cost appreciation of a certain home has to be determined on a case-by-case basis, factoring in information on comparable houses and other relevant elements. This is true in fair economic times as well as poor.

Myth: The home's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.

Fact: House worth is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just looking at the house from the exterior.

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

Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. Home buyers must be supplied with a copy of the document upon written request as per the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their report so long as it exceeds the requirements of their lending group.

Fact: Only if consumers examine a copy of their appraisal can they double-check its accuracy and possibly need to question the result. 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, since 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 area.