Appraisal myths debunked

By law, an appraiser needs to be state-licensed to produce appraisals for federally-related transactions. The law allows you to get a copy of your finished report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: The value that is assessed by the appraiser must be the same as the market value.

Fact: It is probable that Massachusetts, like most states, supports the common myth that the assessed value is no different from the market value; however, this is not always true. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are perfect examples of why the price can vary.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the opinion of value of the property will vary.

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

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

Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property. If the house were rebuilt, the dollar amount required to do so would form the replacement cost.

Myth: There are specific ways that real estate appraisers use to determine the cost of a property, such as the price per square foot.

Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to some facilities, the condition of the property and the value of recent comparable sales. You can count on Norman Haas, Jr.'s appraisers to be forthright in assessing this information.

Myth: When the economy is strong and the worth of houses are found to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to rise based on that same percentage.

Fact: All appreciation of value is on a one-on-one basis, found by data on relevant considerations and the data of comparable homes. It makes no difference if the economy is powerful or on the decline.

Myth: Just examining what the home looks like on the outside gives a good idea of its worth.

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

Myth: Because the consumer is the party who puts up the funding 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: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that purchased the appraisal. Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with one by their lending company.

Myth: Consumers need not be concerned with what is in their appraisal report so long as it satisfies the needs of their lending company.

Fact: A home buyer should definitely read through their report; there might be some questions or some concerns with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, containing useful 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.