Common myths about appraising

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-supported transactions. You have the ability to request a copy of the completed appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal process.

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

Fact: It might be that Idaho, like most states, supports the idea that the assessed value is no different from the market value; however, this is not often the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an prolonged period of time.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the appraised value of the house will vary.

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

Myth: Market value will equal replacement cost.

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

Myth: There are specific methods that real estate appraisers use to determine the opinion of value of a home, like the price per square foot.

Fact: Appraisers complete a comprehensive analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: In a strong economy - when the costs of properties in a given region are found to be increasing by a certain percentage - the costs of individual homes in the vicinity can be expected to increase by that same percentage.

Fact: All increase of value is on a one-on-one basis, found by data on relevant conditions and the data of comparable properties. It doesn't matter if the economy is doing well or declining.

Myth: The property's exterior is determinate of the actual worth of the home; it is unnecessary to do an interior appraisal.

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

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

Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the report. Consumers have to be given a copy of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their document so long as it meets the needs of their lending institution.

Fact: It is very important for home buyers to check over a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, as it contains an exorbitant amount of information - including, but certainly 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.