Common myths about appraising

It is required by law that an appraiser must be state-licensed to create appraisal reports for federally-supported home transactions in Florida. You have the ability to acquire a copy of the finished report from your lender. Contact us if you have any questions about the appraisal process.

Myth: Assessed value should be equal to market value.

Fact: It is probable that Florida, like most states, supports the suggestion that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby homes are exact examples of why this occurs.

Myth: The value of a house will be different depending upon whether the appraisal is provided for the buyer or the seller.

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

Myth: Any time market value is established, it should be similar to the replacement cost of the home.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a house without being under pressure from any outside party to buy or sell. The dollar amount needed to reconstruct a home is what forms the replacement cost.

Myth: Specific formulae, such as the price per square foot of the property, are the ways appraisers use to determine the price of a home.

Fact: There are many different methods that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to specific facilities and the cost of recently sold comparable houses.

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

Fact: Any price at which an appraiser concludes in regards to a certain house is always individualized, based on certain factors found from the information of comparable properties and other specifications within the house itself. It makes no difference whether the economy is excellent or poor.

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Myth: Just looking at what the home looks like on the outside gives an excellent idea of its cost.

Fact: There are a number of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data necessary.

Myth: Since you're the one funding 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 company - unless the lender "releases its interest" in the document. However, home buyers have to be provided with a copy of the report upon written request, due to the Equal Credit Opportunity Act.

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

Fact: It is almost imperative for consumers to read a copy of their report so that they can verify the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an incredible amount of data - including, but not limited to 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 assess house values in property sales involving mortgage-lending transactions.

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

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

Fact: An appraisal report does not fulfill the same purpose as an inspection. The job of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. The point of a home inspector is to assess the condition of the house and its main components, then create a report on these findings.