Appraisal myths & facts

Legally, an appraiser needs to be state certified to write substantiated appraisal reports for federally-related purchase. Also by law, you have the right to demand a copy of the completed report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: Market value will always be equivocal to the assessed value of the property.

Fact: It could be that Missouri, like most states, validates the idea that the assessed value is no different from the market value; however, this is not often the case. Often when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the area have not been reassessed for quite a while, it may vary wildly.

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

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

Myth: Market value should approximate replacement cost.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a property without being under influence from any external party to purchase or sell. The replacement cost is the dollar amount needed to reconstruct a home in-kind.

Myth: There are specific ways that appraisers use to find the opinion of value of a house, like the price per square foot.

Fact: Appraisers make a detailed analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.

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

Fact: Any worth at which an appraiser concludes in regards to a particular house is always individualized, based on certain factors pulled from the information of comparable properties and other considerations within the house itself. It makes no difference whether the economy is good or poor.

Myth: Just looking at what the home looks like on the outside gives an idea of its worth.

Fact: Property worth is determined by a multitude of variables, including location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by inspecting the house from the exterior.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance real estate, they own their appraisal.

Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the report. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be provided with one by their lending agency.

Myth: There's no point for consumers to even worry about what the appraisal contains so long as their lending institution is satisfied.

Fact: It is a very good idea for home buyers to go through a copy of their report so that they can verify the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, as it contains an incredible 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.