While some real estate professionals and consumers might have a good understanding about appraisals and valuation professionals, some common misconceptions do exist.
Myth: Assessed value should equate to market value.
Reality: While most states support the concept that assessed value approximate estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period.
Myth: You generally can tell what a property is worth simply by looking at the outside.
Reality: Property value is determined by a number of factors, including location, condition, improvements, amenities and market trends.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they own their appraisal.
Reality: The appraisal is, in fact, legally owned by the lender — unless the lender “releases its interest” in the document. However, lenders must provide property buyers with free copies of appraisals no later than three days before the loan closes.
Myth: Consumers need not be concerned with what is in the appraisal document so long as it satisfies the needs of their lending institution.
Reality: Only by reading a copy of their appraisal can consumers double-check its accuracy and question the result. Also, it makes a valuable record for future reference, containing useful and often revealing information — including the legal and physical description of the property, square footage measurements, list of comparable properties, description of the general market area and current market trends in the vicinity.
Myth: Appraisers are hired to provide opinions of value only in situations involving mortgage-lending transactions.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
If you have an “opinion of value,” please share your comments.