Common myths about appraising

Legally, a real estate appraiser must be state certified to create legitimate real estate appraisals for federally-related purchase. Also by law, you are allowed to receive a copy of the completed report from your lending agency. Contact Paradigm Appraisal Group, Inc if you have any questions about the appraisal procedure.

Myth: Market value has to be the same as the assessed value of the property.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended period.

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

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

Myth: Market value will equate to replacement cost.

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 specific property. Replacement cost is the dollar amount needed to rebuild a house in-kind.

Myth: Appraisers use a formula, such as a specific price per square foot, to come to the cost of a house.

Fact: An appraisal report is an assertion of information based on the property's size, location, proximity to specific facilities, the condition of the property and the price of recent comparable sales. You can rely on Paradigm Appraisal Group, Inc's appraisers to be professional in assessing this data.

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

Fact: All increase of worth is on an individual basis, determined by information on relevant conditions and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.

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

Fact: To find an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. An outside-only inspection certainly can't provide all of the information needed.

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

Fact: Legally, the document is owned by the lending company unless the lender relinquishes their interest in the report. However, consumers must be provided with a copy of the report upon written request, due to the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their report so long as it meets the necessities of their lending company.

Fact: A consumer should definitely look through their appraisal; there might be some questions or some worries about the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing 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 area.