Common myths about appraising

By law, an appraiser is required to be state-licensed to perform appraisals for federally-supported purchases. Also by law, you are allowed to receive a copy of the completed appraisal report from your lending agency. Contact Barnes Appraisal Company if you have any questions about the appraisal procedure.

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

Fact: It could be that Oklahoma, like most states, validates the suggestion that the assessed value equates to the market value; however, this is not always true. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged time.

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

Fact: The value of the house does not affect the salary of the appraiser; because of this, the appraiser has no pressured interest in the worth of the house. Obviously, he will render job with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Market value will be the same as replacement cost.

Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside group to purchase or sell. Replacement value is the dollar amount required to rebuild a house in-kind.

Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the cost of a house.

Fact: There are many numerous methods that an appraiser will use to make a detailed analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable properties.

Myth: When the economy is strong and the worth of houses are found to be increasing by a certain percentage, the other houses in the proximity can be expected to appreciate based on that same percentage.

Fact: Worth appreciation of a certain property is always determined on a case-by-case basis, factoring in information on comparable homes and other relevant elements. This is true in excellent economic times as well as poor.

Myth: The home's exterior is determinate of the actual price of the property; there is no need to do an interior appraisal.

Fact: Home value is determined by a number of variables, including area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by examining the house from the exterior.

Myth: Because the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the report. Because of the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with it by their lending agency.

Myth: There's no point for consumers to even concern themselves with what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: It is almost imperative for consumers to peruse a copy of their appraisal report so that they can double-check the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double 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 area.