Appraisal myths & facts

Legally, a real estate appraiser has to be state certified to produce legitimate real estate appraisals for federally-backed purchase. You are also entitled by law to request a copy of the finished appraisal report from your lending agency. Contact us if you have any questions about the appraisal process.

Myth: Assessed value should equate to market value.

Fact: It is probable that Nebraska, like most states, validates the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are excellent examples of why there might be a differential in price.

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

Fact: The value of the property does not affect the payment of the appraiser; because of this, the appraiser has no preconceived interest in the value of the home. What this means is he will render job with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Any time market value is found, it should equate to the replacement cost of the property.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under duress to buy or sell. Replacement value is the dollar amount needed to rebuild a home in-kind.

Myth: Specific formulae, such as the price per square foot of the property, are what appraisers use to arrive at the worth of a property.

Fact: Appraisers complete a detailed analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: When the economy is doing well and the value of homes are reported to be rising by a certain percentage, the other properties in the neighborhood can be expected to increase based on that same percentage.

Fact: Any worth at which an appraiser arrives in regards to a certain property is always individualized, based on certain factors found from the data of comparable houses and other specifications within the house itself. It makes no difference if the economy is strong or terrible.

Myth: The property's outside is determinate of the actual value of the house; it is unnecessary to do an interior appraisal.

Fact: To conclude an accurate value beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply viewing the property from the outside.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they legally own their appraisal report.

Fact: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the appraisal. Home buyers must be supplied with a version of the appraisal report through request due to the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it meets the needs of their lending company.

Fact: It is a very good idea for home buyers to go through a copy of their report so that they can double-check the accuracy of the document, 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 wealth of information contained in an report that could be useful to the consumer 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 area.