Appraisal myths & facts

Legally, an appraiser has to be state certified to produce legitimate real estate appraisals for federally-supported transactions. Also by law, you have the ability to receive a copy of the completed report from your lender. Contact us if you have any questions about the appraisal process.

Myth: Assessed value generally will be similar to to market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are perfect examples of why there might be a differential in price.

Myth: The appraised value of a property will vary depending upon if 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 appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.

Myth: Market value will approximate replacement cost.

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

Myth: There are specific ways that appraisers use to find the opinion of value of a home, such as the price per square foot.

Fact: An appraisal report is an assertion of data concluded from the property's size, location, proximity to certain facilities, the condition of the property and the price of recent comparable sales. You can count on Wulf Appraisal Corp.'s staff to be honest in assessing this data.

Myth: When the economy is strong and the cost of homes are reported to be appreciating by a certain percentage, the other properties in the proximity can be expected to rise based on that same percentage.

Fact: Price increase of a certain house must be concluded on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the house itself. It doesn't matter if the economy is on the rise or declining.

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

Fact: There are a multitude of different factors that determine property value; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information necessary.

Myth: Since the consumer is the person 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: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, consumers must be provided with a copy of the document upon written request, because of the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even care about what the appraisal report contains so long as their lending agency is fine with the contents therein.

Fact: A consumer should definitely inspect their appraisal report; there will probably be some questions or some concerns with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an report that should be useful to the consumer 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 vicinity.