Appraisal myths & facts

It is required by legal agencies that an appraiser needs to be state-licensed to produce appraisals for federally-related property purchases in Georgia. Also by law, you are allowed to request a copy of the completed report from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: The value that is assessed by the appraiser will be equivalent to the market value.

Fact: While most states back the idea that assessed value equates estimated market value, this generally is not the case. Generally when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for years or more, it may vary wildly.

Myth: The buyer or the seller may have an influence in the cost of the home depending upon for whom the appraiser is working.

Fact: The cost of the home does not affect the salary of the appraiser; as a result, the appraiser has no personal interest in the worth of the property. This means that he will complete his job with impartiality and independence regardless for whom the appraisal is provided.

Myth: The replacement value of the house is always is on par with the market value.

Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a property without being under duress from any external party to purchase or sell. If the home were rebuilt, the dollar amount needed to do so would be the replacement cost.

Myth: There are specific ways that real estate appraisers use to determine the cost of a property, like the price per square foot.

Fact: An appraisal report is a collection of data based on the house's size, location, proximity to undesirable facilities, the condition of the home and the price of recent comparable sales. You can rely on Filson's Real Estate Appraisal Services, Inc.'s staff to be professional in assessing this information.

Myth: When the economy is robust and the sales prices of homes are reported to be appreciating by a certain percentage, the other houses in the vicinity can be expected to increase based on that same percentage.

Fact: Value increase of a certain home is always concluded on an individualized basis, factoring in information on comparable properties and other relevant considerations. It doesn't matter if the economy is doing well or declining.

Myth: Just examining what the property looks like on the outside gives an idea of its value.

Fact: There are a multitude of different factors that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by inspecting the house from the exterior.

Myth: Because the consumer is the person who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. Home buyers have to be given a version of the appraisal report through request because of the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even concern themselves with what the report contains so long as their lending company is satisfied.

Fact: It is a very good idea for consumers to look at a copy of their appraisal report so that they can verify the accuracy of the document, in case there is a 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 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 proximity.