Appraisal myths & facts

It is required by law that an appraiser needs to be state-licensed to perform appraisals for federally-supported property transactions in Nebraska. You have the ability to acquire a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.

Myth: Assessed value generally will be similar to to market value.

Fact: While most states back the concept that assessed value is the same as estimated market value, this often is not the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an extended period of time.

Myth: Depending on whether the appraisal is provided for the buyer or the seller, the cost of the home will vary.

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

Myth: Market value should equate to replacement cost.

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. If the home were reconstructed, the dollar amount required to do so would be the replacement cost.

Myth: Specific formulae, like the price per square foot, are what appraisers use to come to the cost of a home.

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

Myth: When the economy is strong and the cost of homes are reported to be increasing by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.

Fact: Cost increase of a certain house is always determined on an individualized basis, factoring in information on comparable properties and other relevant elements. It doesn't matter if the economy is on the rise or declining.

Myth: The property's exterior is determinate of the actual value of the property; there is no need to do an interior appraisal.

Fact: There are a multitude of different factors that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just examining the home from the outside.

Myth: Considering that the consumer is the party who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: Legally, the document is owned by the lending agency unless the lender releases their interest in the report. However, consumers must be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

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

Fact: It is almost imperative for home buyers to go through a copy of their appraisal report so that they can double-check the accuracy of the report, 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. Also, the report makes a near perfect record for future reference, comprised of helpful and often-revealing data - including 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.