Common myths about appraising

It is mandated by law that a real estate appraiser must be state-licensed to offer appraisals for federally-supported property sales in Oklahoma. Also by law, you are allowed to request a copy of the finished appraisal from your lender. Contact us if you have any concerns about the appraisal process.

Myth: The value that is ascertained by the appraiser is required to be the same as the market value.

Fact: While most states back the suggestion that assessed value approximates estimated market value, this generally is not the case. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are excellent examples of why the price can vary.

Myth: The value of a house will be different depending upon if the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no vested interest in the outcome of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value should equate to replacement cost.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain property, with neither being under pressure to buy or sell. The replacement cost is the dollar amount required to reconstruct a property in-kind.

Myth: Certain formulae, like the price per square foot, are what appraisers use to arrive at the value of a house.

Fact: There are many different formulae that an appraiser will use to make a detailed analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.

Myth: In a powerful economy - when the costs of homes in a given region are reported to be rising by a particular percentage - the costs of individual homes in the proximity can be expected to appreciate by that same percentage.

Fact: All increase of price is on an individual basis, concluded by data on relevant elements and the data of comparable properties. It makes no difference if the economy is good or on the decline.

Myth: Just seeing what the property looks like on the outside gives an excellent idea of its cost.

Fact: There are a number of different factors that conclude property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by inspecting the house from the exterior.

Myth: Considering that the consumer is the person who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the report. Consumers must be supplied with a version of the document through request as per the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the requirements of their lending company.

Fact: Only if consumers examine a copy of their appraisal report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an appraisal 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 proximity.