Appraisal myths & facts

It is required by legal agencies that an appraiser needs to be state-licensed to offer appraisals for federally-related real estate transactions in California. The law allows you to get a copy of your finished appraisal from your lender after it has been provided. Contact us if you have any questions about the appraisal procedure.

Myth: Market value will be similar to the assessed value of the property.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby properties are prime examples of why this occurs.

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

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

Myth: Any time market value is established, it should be the same as the replacement cost of the property.

Fact: Without any pressure from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property. If the home were reconstructed, the dollar amount required to do so would form the replacement cost.

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

Fact: An appraisal is a collection of data concluded from the home's size, location, proximity to undesirable facilities, the condition of the home and the worth of recent comparable sales. You can rely on James P Spas & Associates's staff to be ethical in assessing this data.

Myth: As homes appreciate by a certain percentage - in a strong economy - the houses within the same neighborhood are expected to increase by the same amount.

Fact: Any cost at which an appraiser concludes in regards to a certain house is always personalized, based on certain factors pulled from the data of comparable houses and other considerations within the property itself. This is true in good economic times as well as poor.

Myth: Just seeing what the property looks like on the outside gives an excellent idea of its worth.

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the home on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these things can be found simply by looking at the property from the outside.

Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance your house, you own the produced appraisal report.

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

Myth: Home buyers need not care about what is in their report so long as it exceeds the necessities of their lending group.

Fact: Only if consumers look at a copy of their appraisal can they double-check 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 a valuable record for future reference, filled with helpful and often-revealing information - 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.