Appraisal myths & facts

It is required by the government that an appraiser must be state-licensed to perform appraisals for federally-supported home sales in New York. Also by law, you are allowed to receive a copy of the completed appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Assessed value will always equate to market value.

Fact: It might be that New York, like most states, supports the suggestion that the assessed value equates to 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 this occurs.

Myth: The appraised value of a property will vary depending upon whether the appraisal is conducted for the buyer or the seller.

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

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

Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a house without being under pressure from any external party to purchase or sell. The dollar amount required to reconstruct a house is what constitutes the replacement cost.

Myth: Certain formulae, such as the price per square foot of the property, are the methods appraisers use to determine the value of a house.

Fact: There are many numerous methods that an appraiser will use to make a full analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable houses.

Myth: As homes appreciate by a certain percentage - in a strong economy - the homes within the same neighborhood are expected to increase by the same amount.

Fact: Any value at which an appraiser concludes concerning a certain house is always personalized, based on certain factors pulled from the data of comparable properties and other considerations within the property itself. It makes no difference whether the economy is powerful or on the decline.

Myth: You can commonly tell what a house is worth simply by looking at the outside.

Fact: Property value is determined by a number of variables, including location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information necessary.

Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your home, you own the provided appraisal.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that ordered the appraisal. However, home buyers must be given a copy of the report upon written request, through the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their appraisal report so long as it meets the needs of their lending agency.

Fact: It is very important for home buyers to look at a copy of their appraisal report so that they can double-check the accuracy of the document, 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 appraisal makes an excellent record for future reference, filled with useful and often-revealing information - 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 area.