Common myths about appraising

By law, an appraiser is required to be state-licensed to perform appraisals for federally-backed purchases. The law allows you to acquire a copy of your finished appraisal report from your lender after it has been provided. Contact Sirius Appraisal Services if you have any concerns about the appraisal procedure.

Myth: Market value will always be the same as the assessed value of the property.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended time.

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

Fact: The appraiser has no vested interest in the outcome of the appraisal report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value should approximate replacement cost.

Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under pressure to buy or sell. If the home were rebuilt, the dollar amount necessary to do so would set the replacement cost.

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

Fact: Appraisers make an exhaustive analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

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

Fact: Worth appreciation of a certain property has to be determined on a case-by-case basis, factoring in data on comparable homes and other relevant elements. It doesn't matter if the economy is doing well or declining.

Have other questions about appraisers, appraising or real estate in Queens County or Jamaica Estates, NY?

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Myth: The property's outside is determinate of the actual value of the property; there is no need to do an interior appraisal.

Fact: There are a multitude of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply viewing the house from the exterior.

Myth: Because the consumer is the party who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given one by their lender.

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

Fact: Only if home buyers check out a copy of their appraisal 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. Also, the appraisal report makes a valuable record for future reference, containing helpful and often-revealing information - 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 vicinity.

Myth: The only reason someone would order an appraisal is if a home needs its cost estimated in a lender sales transaction.

Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

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

Fact: Appraisal reports have almost nothing in common with a home inspection report. The reason behind an appraisal is to arrive at an opinion of fair market value during the appraisal process and the production of the report. The task of a home inspector is to assess the condition of the house and its major components, then provide a report on these conclusions.