Appraisal myths & facts

Legally, a real estate appraiser must be state certified to perform legitimate real estate appraisals for federally-related sales. You are also entitled by law to demand a copy of the completed appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.

Myth: The value that is ascertained by the appraiser is required to be equivalent to the market value.

Fact: It is possible that Utah, like most states, supports the idea that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.

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

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

Myth: The replacement value of the house should be is on par with the market value.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular house, with neither being under undue influence to buy or sell. Replacement value is the dollar amount needed to reconstruct a property in-kind.

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

Fact: Appraisers make a detailed analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent values of comparable homes.

Myth: In a powerful economy - when the sales prices of homes in a given neighborhood are found to be rising by a certain percentage - the prices of individual properties in the area can be expected to rise by that same percentage.

Fact: Price increase of a certain property must be concluded on an individualized basis, factoring in data on comparable houses and other relevant specifications within the home itself. It doesn't matter if the economy is doing well or declining.

Myth: Just seeing what the house looks like on the outside gives a good idea of its value.

Fact: There are a number of different variables that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information needed.

Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal. Home buyers have to be supplied with a version of the appraisal report through request as per the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even worry about what the report contains so long as their lending institution is satisfied.

Fact: Only if consumers look at a copy of their appraisal report can they ensure 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 an incredible amount of information contained in an appraisal 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 area.