Appraisal myths debunked

It is mandated by legal agencies that an appraiser needs to be state-licensed to create appraisal reports for federally-related real estate transactions in Michigan. The law gives you the right to receive a copy of your completed appraisal from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal process.

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

Fact: It is possible that Michigan, like most states, supports the idea that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an extended time.

Myth: The value of a home will be different depending upon if the appraisal is produced for the buyer or the seller.

Fact: The price of the home does not affect the payment of the appraiser; as such, the appraiser has no pressured interest in the opinion of value of the home. This means that he will conduct services with impartiality and independence regardless for whom the appraisal is conducted.

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

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under pressure to buy or sell. The replacement cost is the dollar amount required to reconstruct a property in-kind.

Myth: Certain formulae, like the price per square foot, are the methods appraisers use to arrive at the worth of a home.

Fact: There are many differing processes 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 undesirable facilities and the worth of recently sold comparable properties.

Myth: When the economy is on the rise and the cost of houses are found to be increasing by a certain percentage, the other houses in the proximity can be expected to increase based on that same percentage.

Fact: Worth appreciation of a specific home is always concluded on an individualized basis, factoring in data on comparable properties and other relevant specifications within the home itself. This is true in good economic times as well as bad.

Myth: Just seeing what the home looks like on its exterior gives an idea of its cost.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply looking at the house from the outside.

Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their property, they legally own their appraisal report.

Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending company that purchased the appraisal. Home buyers have to be supplied with a copy of the report through request as per the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their appraisal report so long as it exceeds the needs of their lending institution.

Fact: Only if home buyers look over a copy of their 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 an excellent record for future reference, containing useful and often-revealing data - 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 area.