Appraisal myths & facts

It is required by law that a real estate appraiser needs to be state-licensed to create appraisal reports for federally-related real estate purchases in Michigan. The law entitles you to acquire a copy of your finished report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.

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

Fact: While most states back the suggestion that assessed value equates estimated market value, this often is not the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an extended period.

Myth: The value of a house will differ depending upon if the appraisal is provided for the buyer or the seller.

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

Myth: The replacement value of the house should be is on par with the market value.

Fact: Without any suggestion from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement cost is the dollar amount required to reconstruct a house in-kind.

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

Fact: There are many differing methods that an appraiser will use to make a comprehensive investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the cost of recently sold comparable homes.

Myth: As houses increase their worth by a certain percentage - in a robust economic state - the homes in proximity are expected to appreciate by the same amount.

Fact: All appreciation of worth is on an individual basis, concluded by data on relevant conditions and the data of comparable houses. It makes no difference whether the economy is excellent or bad.

Myth: The property's outside is determinate of the actual price of the house; it is unnecessary to do an interior inspection.

Fact: To find an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no possible way to get all of this information from simply inspecting 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 home, you own the ordered appraisal report.

Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal. Consumers have to be supplied with a copy of the document through request as per the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even care about what the appraisal report contains so long as their lending company is satisfied.

Fact: A home buyer should definitely read through their report; there could be some questions or some worries about the accuracy of the inspection that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an report that will probably be useful to the home buyer 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 vicinity.