Appraisal myths debunked

It is required by the government that a real estate appraiser must be state-licensed to perform appraisals for federally-supported property purchases in Michigan. Also by law, you are entitled to request a copy of the finished report from your lending agency. Contact Community Appraisal if you have any questions about the appraisal procedure.

Myth: Assessed value will always be the same as to market value.

Fact: While most states support the idea that assessed value is equal to estimated market value, this generally is not the case. There are times when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the Oakland County have not been reassessed for years or more, it may vary wildly.

Myth: The buyer or the seller often will have impact in the cost of the home depending upon for whom the appraiser is working.

Fact: The appraiser has no vested interest in the result of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value will approximate replacement cost.

Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. If the property were reconstructed, the dollar amount necessary to do so would form the replacement cost.

Myth: There are certain methods that appraisers use to show the opinion of value of a property, like the price per square foot.

Fact: Appraisers make a detailed analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.

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

Fact: Value appreciation of a specific property is always determined on a case-by-case basis, factoring in data on comparable houses and other relevant elements. This is true in fair economic times as well as bad.

Have other questions about appraisers, appraising or real estate in Oakland County or Oakland County, MI?

Contact Community Appraisal

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

Fact: There are a number of different variables that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just looking at the house from the exterior.

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

Fact: Legally, the report is owned by the lender unless the lender releases their interest in the appraisal. However, home buyers have to be provided with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the needs of their lender.

Fact: A home buyer should definitely inspect their document; there will probably be some questions or some concerns about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, filled with useful and often-revealing data - including, but 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 proximity.

Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the cost of a house during a sales transaction involving a lending company.

Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: An appraisal is no different than a home inspection report.

Fact: An appraisal does not fulfill the same purpose as an inspection report. The point of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the completion of the report. The point of a home inspector is to determine the condition of the house and its main components, then compose a report on their conclusions.