Appraisal Fiction vs. Facts

October 13th, 2014 Posted by Educational 0 thoughts on “Appraisal Fiction vs. Facts”

toledoAppraisals are an uncommon or one-time experience for most people and as a result, many people tend to have a lot of misconceptions and misunderstandings about the appraisal process as well as the intended results.

So to clear up some of these misconceptions I’ve listed many of the ‘Facts vs. Fiction’ down below when it comes to appraisers, appraisals, and the appraisal process:

Fiction: Assessed values always equate market value.
Fact: Although many states validate the idea that the assessed value is the same as market value; this is normally the exception and not the rule. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an extended period of time.

Fiction: The buyer or the seller can have an influence in the value of the home depending on who the appraiser is working for.
Fact: The appraiser should have an unbiased opinion and no personal interest in the result of the appraisal report and should complete the assignment with complete independence, objectivity and impartiality – no matter whom the appraisal is being prepared for.

Fiction: Market value will mirror replacement cost.
Fact: Market value is determined by what a willing buyer would be willing to pay a willing seller for a specific property, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to reconstruct a property in-kind.

Fiction: There are specific ways that appraisers use to show the cost of a property, like the price per square foot.
Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent sale prices of nearby comparable homes.

Fiction: When the economy is robust and the sales prices of homes are found to be rising by a certain percentage, other homes in the area can be expected to appreciate by that exact same percentage.
Fact: All appreciation of value is on an individual basis, found by information on relevant considerations and the data of comparable homes. This is true and appropriate in excellent economic times as well as bad.

Fiction: You can usually assess what a home is worth simply by looking at the exterior.
Fact: Home value is concluded by a number of factors, including – but not limited to – area, condition, improvements, amenities, and market trends. It’s quite obvious that none of these variables can be derived simply by examining the exterior of a property.

Fiction: If you’re the one who paid for an appraisal when applying for a loan to purchase or refi your home, you then own the appraisal report and you’re also considered the appraiser’s client.
Fact: Unless a lender releases its vestment in the appraisal, it is legally owned by the lender that ordered the appraisal. Due the Equal Credit Opportunity Act, any home buyer/owner demanding a copy of the appraisal report must be provided with it by their lending agency. Although you may have paid the lender for the appraisal, the lender typically orders the appraisal and as a result, the appraiser’s client is the lender…not you.

Fiction: There’s no need for a consumer to concern themselves with what’s in the appraisal so long as their lender is satisfied.
Fact: A consumer should always read through an appraisal as there may be some questions or concerns about the accuracy of the report or unknown issues about the property that may need to be addressed. Remember, most likely this is by far the most expensive and important investment a person will ever make. An appraisal can serve as a record for the future and the past, as it contains an exorbitant amount of 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.

Fiction: An FHA appraisal is the same as a home inspection report.
Fact: An FHA appraisal does not fulfill anywhere near the same purpose as a home inspection. The purpose of an appraisal is to form an opinion of market value during the appraisal process while the task of a home inspector is to assess the condition of the house and its components, then write a report on these findings.

I hope you found this helpful and if you have any additional questions, thoughts, or comments please leave them down below.

Altermatt Appraisal Services specializes in appraisals for divorce, bankruptcy, estate, date of death, tax appeals, pre-listings, and more throughout the greater Toledo area. For more info contact us at (419) 754-3396, visit our website at, or email us @

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    John D
    John D

    5 out of 5 stars

    posted 10 months ago

    Punctual, professional, considerate and timely with his completion of the reports. I would recommend Bill for any appraisal needs.

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