Common myths about appraising

It is mandated by the government that a real estate appraiser needs to be state-licensed to produce appraisals for federally-related home transactions in Tennessee. The law gives you the right to acquire a copy of your completed appraisal from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

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

Fact: While most states support the idea that assessed value approximates estimated market value, this usually is not the case. Generally when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the Oak Ridge have not been reassessed for a good length of time, it may vary wildly.

Myth: Depending on if the appraisal is done for the buyer or the seller, the value of the home will vary.

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

Myth: Any time market value is found, it should equate to the replacement cost of the property.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. Replacement value is the dollar amount necessary to rebuild a house in-kind.

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

Fact: There are many varied ways that an appraiser will use to make an in-depth analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable houses.

Myth: When the economy is robust and the worth of homes are reported to be appreciating by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.

Fact: All appreciation of value is on an individual basis, concluded by information on relevant considerations and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.

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

Fact: Property value is concluded by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply examining the home from the outside.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance real estate, they legally own their appraisal report.

Fact: Legally, the report is owned by the lending agency unless the lender releases their interest in the report. Home buyers have to be given a version of the document upon written request because of the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their report so long as it exceeds the necessities of their lending institution.

Fact: Only if home buyers check out 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. An appraisal report can serve as a record for the future, since it contains a great deal of data - 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.