Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-backed purchases. You have the ability to request a copy of the completed appraisal from your lending agency. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value should always equate to market value.

Fact: It could be that Tennessee, like most states, supports the common myth that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged period of time.

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

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 conducted.

Myth: Market value will equal replacement cost.

Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under pressure from any outside party to buy or sell. If the house were rebuilt, the dollar amount necessary to do so would make up the replacement cost.

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

Fact: There are many different ways that an appraiser will use to make a detailed investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable homes.

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

Fact: Any worth at which an appraiser arrives in regards to a specific home is always personalized, based on certain factors found from the information of comparable homes and other specifications within the house itself. This is true in fair economic times as well as poor.

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

Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no possible way to get all of this information from simply looking at the house from the exterior.

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

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Home buyers have to be given a version of the report through request as per the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their report so long as it meets the necessities of their lending company.

Fact: It is almost imperative for home buyers to go through a copy of their report so that they can double-check the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information contained in an appraisal that should 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.