Common myths about appraising

It is enforced by the government that a real estate appraiser must be state-licensed to write appraisals for federally-related home purchases in Florida. You also have the right to request a copy of the completed appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Market value will be the same as the assessed value of the property.

Fact: While most states uphold the idea that assessed value approximates estimated market value, this generally is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are prime examples of why the price can vary.

Myth: The value of a house will be different depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: There is no vested interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.

Myth: The replacement cost of the home will be is on par with the market value.

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under duress to buy or sell. If the house were rebuilt, the dollar amount necessary to do so would set the replacement cost.

Myth: Certain methods, such as the price per square foot, are what appraisers use to ascertain the price of a house.

Fact: An appraisal report is an assertion of data based on the house's size, location, proximity to undesirable facilities, the condition of the house and the value of recent comparable sales. You can count on Island House Appraisals Inc's appraisers to be professional in assessing this data.

Myth: When the economy is doing well and the value of homes are reported to be appreciating by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.

Fact: Value increase of a specific house must be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant specifications within the property itself. It makes no difference if the economy is robust or on the decline.

Myth: Just looking at what the home looks like on the outside gives a good idea of its value.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. An external inspection certainly can't provide all of the data required.

Myth: Because the consumer is the party who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the report. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given one by their lending company.

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: Only if home buyers read 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. Also, the report makes an excellent record for future reference, comprised of helpful and often-revealing data - 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.