Common myths about appraising

By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-related purchases. The law entitles you to get a copy of your completed report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal procedure.

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

Fact: It might be that Massachusetts, like most states, supports the suggestion that the assessed value is no different from the market value; however, this is not always true. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby homes are excellent examples of why this occurs.

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

Fact: The price of the property does not affect the salary of the appraiser; as such, the appraiser has no vested interest in the value of the home. This means that he will provide business with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Any time market value is established, it should be the same as the replacement cost of the property.

Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement value is the dollar amount necessary to rebuild a property in-kind.

Myth: Appraisers use a formula, like a specific price per square foot, to conclude the value of a house.

Fact: An appraisal is a collection of information based on the home's size, location, proximity to specific facilities, the condition of the house and the value of recent comparable sales. You can depend on South Shore Realty Advisors, Inc's staff to be honest in assessing this data.

Myth: In a powerful economy - when the values of homes in a given area are reported to be rising by a particular percentage - the costs of individual houses in the proximity can be expected to rise by that same percentage.

Fact: All appreciation of value is on a case-by-case basis, determined by information on relevant considerations and the data of comparable houses. It doesn't matter if the economy is doing well or declining.

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

Fact: There are a multitude of different factors that conclude property value; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the information required.

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

Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the report. Under the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be given one by their lender.

Myth: It doesn't concern consumers what's in the report so long as it meets the requirements of their lending company.

Fact: It is almost imperative for consumers to go through a copy of their appraisal report so that they can verify the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an appraisal 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 region.