Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-related sales. Also by law, you have the ability to demand a copy of the finished appraisal report from your lender. Contact Appraisals by Kana if you have any concerns about the appraisal process.

Myth: Assessed value should be the same as to market value.

Fact: It is possible that Louisiana, like most states, supports the common myth that the assessed value is the same as the market value; however, this is not often the case. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby homes are prime examples of why this occurs.

Myth: The opinion of value of a home will differ depending upon whether the appraisal is provided for the buyer or the seller.

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

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

Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. The replacement cost is the dollar amount necessary to rebuild a home in-kind.

Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to arrive at the value of a home.

Fact: An appraisal report is an assertion of data concluded from the home's size, location, proximity to some facilities, the condition of the property and the cost of recent comparable sales. You can count on Appraisals by Kana's appraisers to be honest in assessing this information.

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

Fact: Cost appreciation of a specific home is always concluded on an individualized basis, factoring in information on comparable houses and other relevant considerations. This is true in excellent economic times as well as bad.

Myth: The home's outside is determinate of the actual value of the property; it is unnecessary to do an interior inspection.

Fact: There are a multitude of different factors that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data needed.

Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their home, they own their appraisal report.

Fact: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be given it by their lender.

Myth: Home buyers need not worry about what is in their document so long as it meets the needs of their lending agency.

Fact: Only if home buyers look over 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. There is a great deal of data contained in an appraisal 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.