Appraisal myths & facts

It is mandated by law that an appraiser must be state-licensed to write appraisal reports for federally-related real estate purchases in California. You also have the right to acquire a copy of the completed report from your lending agency. Contact Angela Montoya Appraisal if you have any concerns about the appraisal process.

Myth: Assessed value will always be the same as to market value.

Fact: While most states back the suggestion that assessed value is equal to estimated market value, this generally is not the case. Sometimes when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: The appraised value of a home will vary depending upon if the appraisal is conducted for the buyer or the seller.

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

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

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property. Replacement value is the dollar amount necessary to rebuild a house in-kind.

Myth: There are specific ways that appraisers use to determine the opinion of value of a house, like the price per square foot.

Fact: An appraisal report is an assertion of information based on the house's size, location, proximity to some facilities, the condition of the home and the value of recent comparable sales. You can count on Angela Montoya Appraisal's staff to be forthright in assessing this information.

Myth: In a strong economy - when the worth of houses in a given county are reported to be increasing by a certain percentage - the prices of individual properties in the proximity can be expected to rise by that same percentage.

Fact: Any price at which an appraiser concludes concerning a specific house is always personalized, based on certain factors derived from the data of comparable properties and other considerations within the property itself. It makes no difference whether the economy is strong or poor.

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

Fact: Property worth is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found just by inspecting the house from the outside.

Myth: Since you're the one paying for the appraisal when applying for your loan to buy or refinance real estate, you own the provided appraisal.

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal report. Consumers have to be provided with a version of the appraisal report through request because of the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal so long as it satisfies the needs of their lending group.

Fact: A home buyer should definitely inspect their report; there will probably be some questions or some worries with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, since it contains a great deal of information - 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 vicinity.