Property Evaluations
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Nationwide Appraisals
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Title Research
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Appraisals Misconceptions vs. Truth
An appraisal is something that most people will go through at least once in their lifetime. There are many misconceptions about appraisals, and we have compiled most of them below along with the truth to each myth.
Misconception: The assessed value should equal its market value.
Truth: Most states support the perception that the assessed value is close to the estimated market value, but this is not always accurate. If the interior has been remodeled and the assessor is not aware of it, or if the surrounding properties have not been assessed for an extended period of time, these things can often impact the assessed value of a home.
Misconception: Appraisers use a formula (example, price per square foot) to calculate the value of a home.
Truth: Appraisers use many factors to determine the value of a home. Some determining factors are the location of the home, the size of the lot, the size and condition of the home, recent sale prices of comparable properties in the area, and proximity to schools and other public facilities.
Misconception: When the economy is doing well, and the sale prices of homes in a given area are rising by a certain percentage, the value of individual property in the same are can be expect to appreciate by the same percentage.
Truth: The value appreciation of a specific property must be determined on an individualized basis, factoring in data on comparable properties and other relevant considerations. This is true when the economy is flourishing as well as when it’s weak.
Misconception: The consumer does not need to review the appraisal document as long as it satisfies the lender.
Truth: The consumer should read a copy of their appraisal to double-check the accuracy and question any results if necessary. Also, the appraisal paperwork is very valuable for future reference, containing useful and often times revealing information such as the legal description of the property, square footage measurements, list of comparable properties, and a narrative of the current real-estate activity and/or market trends in the vicinity.
Misconception: You only need an appraiser when a lender is involved on a property sell.
Truth: Appraisals can provide you with valuable information even when you’re not planning to sell your home or property. It can help with a variety of items including estate planning, dispute resolution, zoning and tax assessment review, relocating, home improvement costs vs. value estimations, taking out another mortgage or re-financing, and reviewing costs for insurance claims.
Misconception: An appraisal is the same as a home inspection.
Truth: An appraisal does not serve the same purpose as a home inspection. An Appraiser generates a written report about the value of the home based on several factors. A home inspector creates a report on the condition of the home and its major components.
Misconception: I cannot do anything to improve my home’s valuation.
Truth: Appraisers will take into account the overall maintenance of a home. The Appraiser will look at the walls, flooring, floor covers, built-in appliances, mechanical systems, etc. are all in working and good condition. Keeping a well-maintained home is of importance in receiving a good valuation.
Misconception: My home must be spotless when an Appraiser comes to evaluate it.
Truth: While the overall maintenance of the house will be taken into account, the cleanliness of the house will not cause your valuation to be lower or higher. However, if the house is clean and orderly, this would indicate to the Appraiser that the home has been taking good care of and maintained.