Common myths about appraising

It is required by legal agencies that an appraiser needs to be state-licensed to create appraisal reports for federally-supported property transactions in Massachusetts. The law entitles you to receive a copy of your finished appraisal from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal process.

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

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an extended period of time.

Myth: The opinion of value of a property will be different depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: The price of the house does not affect the salary of the appraiser; because of this, the appraiser has no personal interest in the opinion of value of the home. Obviously, he will provide business with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: Any time market value is found, it should equate to the replacement cost of the home.

Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under undue influence to buy or sell. If the house were reconstructed, the dollar amount required to do so would make up the replacement cost.

Myth: Appraisers use a formula, such as a certain price per square foot, to conclude the worth of a house.

Fact: An appraisal is an amalgamation of information based on the property's size, location, proximity to undesirable facilities, the condition of the home and the price of recent comparable sales. You can depend on South Shore Realty Advisors, Inc's appraisers to be professional in assessing this data.

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

Fact: All appreciation of price is on a case-by-case basis, determined by information on relevant elements and the data of comparable homes. It doesn't matter if the economy is on the rise or declining.

Myth: Just examining what the house looks like on the outside gives an excellent idea of its cost.

Fact: House value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just looking at the home from the exterior.

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

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal report. However, consumers must be provided with a copy of the report upon written request, through the Equal Credit Opportunity Act.

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

Fact: A consumer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an report that can 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.