Common myths about appraising

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-supported transactions. You are also entitled by law to request a copy of the completed report from your lending agency. Contact us if you have any concerns about the appraisal procedure.

Myth: The value that is assessed by the appraiser must be equivalent to the market value.

Fact: It is probable that Florida, like most states, validates the idea that the assessed value is no different from the market value; however, this is not often the case. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an extended period.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the opinion of value of the home will vary.

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

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

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home. If the house were rebuilt, the dollar amount necessary to do so would form the replacement cost.

Myth: There are certain methods that appraisers use to find the cost of a property, such as the price per square foot.

Fact: There are many different calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable houses.

Myth: When the economy is robust and the value of houses are reported to be rising by a certain percentage, the other homes in the area can be expected to rise based on that same percentage.

Fact: All appreciation of value is on a case-by-case basis, determined by information on relevant considerations and the data of comparable houses. It makes no difference if the economy is powerful or bad.

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

Fact: To determine an accurate worth beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. An external inspection definitely can't provide all of the data needed.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to purchase or refinance real estate, you own the produced appraisal.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. However, home buyers must be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even care about what the appraisal contains so long as their lender is satisfied.

Fact: It is almost imperative for home buyers to read a copy of their report so that they can verify the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, filled with useful and often-revealing data - including 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.