Appraisal myths debunked

By law, an appraiser needs to be state-licensed to perform appraisals for federally-related transactions. You are also entitled by law to request a copy of the completed appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

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

Fact: It is probable that Wisconsin, like most states, supports the idea that the assessed value equates to the market value; however, this is not always true. Sometimes when interior remodeling has been done and the assessor is not aware of the improvement or properties in the Eau Claire have not been reassessed for quite some time, it may vary wildly.

Myth: The appraised value of a house will vary depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The appraiser has no personal interest in the result of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Any time market value is established, it should equal the replacement cost of the home.

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

Myth: There are certain methods that real estate appraisers use to determine the value of a home, like the price per square foot.

Fact: There are many numerous processes that an appraiser will use to make an in-depth analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable houses.

Myth: In a robust economy - when the costs of homes in a given county are reported to be rising by a certain percentage - the values of individual houses in the proximity can be expected to rise by that same percentage.

Fact: Cost appreciation of a certain property must be concluded on a case-by-case basis, factoring in data on comparable properties and other relevant elements. It makes no difference whether the economy is robust or terrible.

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

Fact: Property value is concluded by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just inspecting the house from the exterior.

Myth: Since the consumer is the one who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the document. However, consumers must be given a copy of the report upon written request, due to the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even care about what the report contains so long as their lender is fine with the contents therein.

Fact: It is a very good idea for consumers to read a copy of their appraisal report so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, containing 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 vicinity.