Appraisal myths & facts

It is required by the government that a real estate appraiser needs to be state-licensed to perform appraisals for federally-supported property purchases in Michigan. Also by law, you are allowed to receive a copy of the completed appraisal report from your lending agency. Contact our professional staff if you have any questions about the appraisal process.

Myth: Assessed value should always be similar to to market value.

Fact: While most states support the idea that assessed value equates estimated market value, this commonly is not the case. Generally when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the Howell have not been reassessed for years or more, it may vary wildly.

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

Fact: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is ordered.

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

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 purchase or sell. If the house were rebuilt, the dollar amount required to do so would form the replacement cost.

Myth: Certain methods, such as the price per square foot, are the methods appraisers use to come to the price of a property.

Fact: Appraisers make an exhaustive analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.

Myth: As properties appreciate by a specific percentage - in a robust economic state - the houses within the same neighborhood are figured to appreciate by the same amount.

Fact: Value appreciation of a certain home is always determined on a case-by-case basis, factoring in information on comparable houses and other relevant elements. It makes no difference if the economy is strong or bad.

Myth: You can commonly tell what a house is worth simply by looking at the exterior.

Fact: To find an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. An outside-only inspection definitely can't provide all of the information required.

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

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. Consumers must be given a copy of the report upon written request because of the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even concern themselves with what the report contains so long as their lending agency is fine with the contents therein.

Fact: A home buyer should definitely inspect their report; there may be some questions or some concerns about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a valuable record for future reference, comprised of helpful and often-revealing information - 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 vicinity.