Appraisal myths & facts

It is mandated by law that an appraiser is required to be state-licensed to offer appraisal reports for federally-related real estate sales in Florida. The law allows you to get a copy of your finished appraisal from your lending agency after it has been provided. Contact Caleb Hollis Appraisals Inc. if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser should be the same as the market value.

Fact: It might be that Florida, like most states, supports the common myth that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby homes are prime examples of why the price can vary.

Myth: The value of a house will vary depending upon whether the appraisal is ordered for the buyer or the seller.

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

Myth: The replacement value of the home will be is on par with the market value.

Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular home. If the house were rebuilt, the dollar amount required to do so would make up the replacement cost.

Myth: There are certain ways that real estate appraisers use to show the opinion of value of a house, such as the price per square foot.

Fact: An appraisal report is a collection of information concluded from the property's size, location, proximity to certain facilities, the condition of the house and the cost of recent comparable sales. You can depend on Caleb Hollis Appraisals Inc.'s appraisers to be professional in assessing this data.

Myth: When the economy is strong and the sales prices of properties are reported to be rising by a certain percentage, the other homes in the proximity can be expected to rise based on that same percentage.

Fact: Price appreciation of a certain home has to be determined on an individualized basis, factoring in information on comparable homes and other relevant specifications within the home itself. It makes no difference whether the economy is excellent or poor.

Myth: You can often tell what a house is worth simply by looking at the exterior.

Fact: There are a number of different variables that conclude property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by examining the property from the outside.

Myth: Since you're the one providing the money for the appraisal report when applying for your loan to buy or refinance your house, you own the provided appraisal report.

Fact: Legally, the document is owned by the lending agency unless the lender relinquishes their interest in the appraisal. However, home buyers have to be provided with a copy of the document upon written request, due to the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the needs of their lending company.

Fact: A home buyer should definitely read through their report; there will probably be some questions or some concerns with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal that can be useful to the consumer in the future, such as 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 proximity.