Common myths about appraising

By law, an appraiser is required to be state-licensed to offer appraisals for federally-backed transactions. Also by law, you have the ability to request a copy of the completed appraisal from your lender. Contact us if you have any concerns about the appraisal process.

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

Fact: It might be that Florida, like most states, validates the common myth that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. There are times when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the Destin have not been reassessed for years or more, it may vary wildly.

Myth: The buyer or the seller will have leverage in the value of the house depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the outcome of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

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

Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular property. The dollar amount necessary to reconstruct a house is what constitutes the replacement cost.

Myth: Certain methods, such as the price per square foot of the property, are what appraisers use to come to the worth of a home.

Fact: Appraisers complete a full analysis of all factors in consideration to the price of a home, including its location, condition, size, proximity to facilities and recent costs of comparable homes.

Myth: In a robust economy - when the prices of homes in a given region are found to be appreciating by a certain percentage - the prices of individual properties in the area can be expected to increase by that same percentage.

Fact: Worth appreciation of a certain home must be concluded on an individualized basis, factoring in data on comparable houses and other relevant considerations. This is true in excellent economic times as well as bad.

Myth: Just seeing what the property looks like on its exterior gives an idea of its worth.

Fact: Home value is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by looking at the house from the outside.

Myth: Since the consumer is the one who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.

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

Myth: Consumers need not care about what is in their report so long as it meets the needs of their lending group.

Fact: Only if consumers examine a copy of their report can they verify 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 a near perfect 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 proximity.