Appraisal myths debunked

It is mandated by legal agencies that a real estate appraiser needs to be state-licensed to produce appraisals for federally-related real estate purchases in North Carolina. You also have the right to request a copy of the finished appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.

Myth: Assessed value will always equate to market value.

Fact: It might be that North Carolina, like most states, validates the common myth that the assessed value equates to the market value; however, this is not often the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are exact examples of why the price can vary.

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

Fact: The appraised value of the house does not affect the salary of the appraiser; due to this, the appraiser has no preconceived interest in the opinion of value of the property. What this means is he will render business with impartiality and independence regardless for whom the appraisal is conducted.

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

Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a property without being under pressure from any external group to purchase or sell. Replacement cost is the dollar amount needed to reconstruct a home in-kind.

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

Fact: Appraisers complete a comprehensive analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.

Myth: In a strong economy - when the values of houses in a given area are found to be rising by a particular percentage - the worth of individual homes in the proximity can be expected to rise by that same percentage.

Fact: All appreciation of value is on a case-by-case basis, determined by information on relevant conditions and the data of comparable homes. It makes no difference if the economy is strong or terrible.

Myth: Just seeing what the property looks like on its exterior gives a good idea of its cost.

Fact: Property value is determined by a number of factors, including area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data needed.

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

Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. By the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be provided with it by their lending company.

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the necessities of their lending company.

Fact: Only if consumers examine a copy of their report can they ensure 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 makes an invaluable record for future reference, containing useful and often-revealing 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.