Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-supported sales. The law entitles you to receive a copy of your finished appraisal report from your lending agency after it has been provided. Contact Herrin Appraisal Company if you have any questions about the appraisal procedure.

Myth: Market value should be equivocal to the assessed value of the property.

Fact: It is possible that North Carolina, like most states, supports the common myth that the assessed value is no different from the market value; however, this is not always true. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby properties are excellent examples of why the price can vary.

Myth: The value of a property will vary depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value will equal replacement cost.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. The dollar amount demanded to reconstruct a home is what shows the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to conclude the value of a home.

Fact: There are many numerous ways that an appraiser will use to make a comprehensive analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable homes.

Myth: As properties increase their worth by a specific percentage - in a robust economic state - the homes nearby are figured to appreciate by the same amount.

Fact: Any value at which an appraiser concludes in regards to a particular property is always individualized, based on certain factors found from the data of comparable properties and other considerations within the property itself. It makes no difference whether the economy is strong or bad.

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Myth: Just looking at what the property looks like on the outside gives a good idea of its value.

Fact: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by inspecting the home from the exterior.

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

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document. However, home buyers have to be provided with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their appraisal report so long as it satisfies the requirements of their lending group.

Fact: A home buyer should definitely read through their report; there will probably be some questions or some worries with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an appraisal 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 proximity.

Myth: Appraisers are hired only to estimate real estate property values in home sales involving mortgage-lending transactions.

Fact: Based upon their qualifications and designations, appraisers can and may provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: A home inspection serves the same purpose as an appraisal.

Fact: Appraisal reports have almost nothing in common with a home inspection report. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. House inspectors will compose a report that will show the condition of the home and its major components and possible damage.

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