Appraisal myths debunked

Legally, an appraiser is required to be state certified to produce legitimate real estate appraisals for federally-supported transactions. The law entitles you to acquire a copy of your finished appraisal from your lending agency after it has been produced. Contact Appraisals by Kana if you have any questions about the appraisal process.

Myth: Assessed value should always equate to market value.

Fact: It could be that Louisiana, like most states, validates the common myth that the assessed value equates to the market value; however, this is not often the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are excellent examples of why there might be a differential in price.

Myth: The buyer or the seller can have an influence in the value of the property depending upon for whom the appraiser is working.

Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is written.

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

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a house without being under duress from any external party to purchase or sell. The dollar amount necessary to rebuild a house is what constitutes the replacement cost.

Myth: There are certain ways that appraisers use to find the cost of a house, like the price per square foot.

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

Myth: When the economy is strong and the sales prices of homes are found to be increasing by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.

Fact: Any cost at which an appraiser arrives in regards to a particular home is always individualized, based on certain factors concluded from the information of comparable properties and other considerations within the house itself. It makes no difference if the economy is good or bad.

Myth: You can commonly tell what a house is worth simply by looking at the exterior.

Fact: There are a multitude of different variables that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply inspecting the home from the outside.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance real estate, they legally own their appraisal report.

Fact: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the appraisal. However, home buyers have to be supplied with a copy of the document upon written request, due to the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their appraisal report so long as it meets the requirements of their lending company.

Fact: A home buyer should definitely inspect their appraisal; there may be some questions or some worries with 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. There is a wealth of information stored in an report that can be useful to the home buyer in the future, such as 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.