Appraisal myths debunked

Legally, an appraiser must be state certified to perform substantiated real estate appraisals for federally-related transactions. You are also entitled by law to request a copy of the completed appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value will always equate to market value.

Fact: It could be that South Carolina, like most states, validates the idea that the assessed value is the same as the market value; however, this is not often the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are excellent examples of why there might be a differential in price.

Myth: The buyer or the seller sometimes may have some pull in the value of the home depending upon for whom the appraiser is working.

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

Myth: Market value should equate to replacement cost.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a certain home, with neither being under duress to buy or sell. Replacement value is the dollar amount necessary to reconstruct a property in-kind.

Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the cost of a house.

Fact: An appraisal is an amalgamation of data based on the property's size, location, proximity to specific facilities, the condition of the house and the cost of recent comparable sales. You can depend on CD Hilburn and Associates's appraisers to be ethical in assessing this information.

Myth: In a powerful economy - when the worth of properties in a given region are found to be increasing by a certain percentage - the values of individual homes in the vicinity can be expected to appreciate by that same percentage.

Fact: Cost appreciation of a specific house must be concluded on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the property itself. It makes no difference if the economy is good or terrible.

Myth: The property's exterior is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.

Fact: There are a multitude of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived just by inspecting the property from the outside.

Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance real estate, you own the provided appraisal report.

Fact: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report. However, home buyers must be given a copy of the report upon written request, due to the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the necessities of their lending company.

Fact: Only if consumers check out a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an report that can be useful to the consumer 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 proximity.