Opinions of Value

Your source for appraisal news and trends

Menu
  • Home
  • AI Resources
  • Education
  • Publications
  • Professional Practice
  • News
  • Advocacy
  • About Us
You are here: Home / appraisal myths / Debunking Myths about Home Appraisals

Debunking Myths about Home Appraisals

June 15, 2015 by Appraisal Institute Staff

Before consumers purchase a home, or refinance an existing mortgage, obtaining an appraisal is a crucial step in the process. However, some misconceptions exist about appraisals and appraisers and the Appraisal Institute encourages homeowners and prospective homebuyers to understand the following myths and realities.

comparablesMyth:  Assessed value should equate to market value.

Reality: While most states support the concept that assessed value approximates estimated market value, this often is not the case.

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

Reality: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality.

Myth: Market value should approximate replacement cost.

Reality: Market value is based on what a willing buyer likely would pay a willing seller for a particular property, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to reconstruct a property in-kind.

Myth: In a robust economy — when the sales prices of homes in a given area are reported to be rising by a particular percentage — the value of individual properties in the area can be expected to appreciate by that same percentage.

Reality: Value appreciation of a specific property must be determined on an individualized basis, factoring in data on comparable properties and other relevant considerations.

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, they own their appraisal.

Reality: The appraisal is 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 promptly after completion, or no later than three days before the loan closes whichever is earlier.

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.

Share your experiences below.

 

Filed Under: appraisal myths

Latest Posts

  • Appraisal Institute Annual Conference Kicks Off Next Week July 29, 2022
  • Online Registration Closes Soon for 2022 Annual Conference June 24, 2022
  • Annual Conference Registration Now Open May 27, 2022
  • Keynote Speaker Announced for 2022 Annual Conference April 29, 2022
  • A Look Inside AI Education: Desktop Appraisals (Bifurcated, Hybrid) and Evaluations Seminar Preview April 21, 2022
  • PAVE Action Plan Released, AI Provided Input March 25, 2022
  • 4 Innovative Commercial Building Features That Could Prove Difficult to Appraise March 15, 2022
  • Share Your Expertise at this Year’s Appraisal Institute Annual Conference February 25, 2022
  • Technology Can Aid, Not Replace, Appraisers February 17, 2022
  • Fair Housing Report on TAF Released, PAVE Report Expected Next January 28, 2022

Posts by topic

  • 2014 Presidents message (5)
  • 2015 President's Messages (12)
  • 2016 President's Messages (8)
  • 2017 President's Messages (13)
  • 2018 Annual Conference (5)
  • 2018 Appraisal Institute President's Messages (3)
  • 2018 President's Messages (9)
  • 2019 Annual Conference (8)
  • 2019 President's Messages (12)
  • 2020 Appraisal Institute President's Messages (8)
  • 2020 President's Messages (5)
  • 2021 President's Message (8)
  • AI Connect (5)
  • AMS (2)
  • appraisal bias (1)
  • appraisal careers (17)
  • Appraisal Insstitute designatons (2)
  • Appraisal Institute (220)
  • Appraisal Institute Annual Meeting (8)
  • Appraisal Institute Annual Meeting (4)
  • Appraisal Institute blog (10)
  • Appraisal Institute Body of Knowledge (3)
  • Appraisal Institute chapters (1)
  • Appraisal Institute designation (5)
  • Appraisal Institute Designations (8)
  • Appraisal Institute Education (2)
  • Appraisal Institute Green Addendum (2)
  • Appraisal Institute media coverage (6)
  • Appraisal Institute volunteer opportunities (3)
  • appraisal legislation (4)
  • appraisal myths (3)
  • appraisal regulation (8)
  • appraisal threshold (5)
  • appraisal thresholds (4)
  • appraisal waivers (1)
  • appraiser diversity (1)
  • appraiser trainee (1)
  • Appraisers (9)
  • Arbitration (2)
  • arbitrator (1)
  • association management system (1)
  • automated valuation models (1)
  • AVM (1)
  • Bifurcated (1)
  • Bifurcated Appraisal (2)
  • big-box properties (1)
  • Call for proposals (1)
  • Candidate for Designation (3)
  • Candidate for Designation (3)
  • challenging appraisals (1)
  • co-op appraisals (1)
  • condo appraisals (1)
  • conservation easement appraisals (1)
  • conservation easements (1)
  • consumer appraisal information (11)
  • coronavirus appraisals (1)
  • designations (3)
  • desktop appraisals (2)
  • Diminution valuation (1)
  • exterior appraisals (1)
  • FHA appraisals (1)
  • FHA Handbook 4000.1 (1)
  • green valuation (9)
  • HERS Index (1)
  • HERS rating (1)
  • Highest and best use (2)
  • home appraisals (7)
  • home inspections (3)
  • Home Renovations (2)
  • Home Winterization Tips (2)
  • Hybrid Appraisal (1)
  • International outreach (1)
  • International Valuation Conference (5)
  • landscaping and appraisal (2)
  • landscaping and property values (2)
  • Main (10)
  • market analysis (3)
  • multifamily appraisals (1)
  • office building appraisals (1)
  • office property appraisals (1)
  • oil spills (1)
  • overhead transmission lines (1)
  • property tax appeals (3)
  • PUD appraisals (1)
  • relocation (1)
  • Residential Appraisal (1)
  • residential appraisals (8)
  • residential appraisers (4)
  • RMAT (1)
  • rural property (3)
  • social media for appraisers (2)
  • solar (1)
  • SRA designation (1)
  • TAF (1)
  • taxes (1)
  • technology and valuation (2)
  • testimony (2)
  • The Appraisal Foundation (1)
  • The Appraisal Institute (105)
    • 2022 Presidents Messages (3)
    • Appraisal Institute Review Designations (1)
  • The Appraisal Journal (2)
  • timeshare appraisals (1)
  • transportation (1)
  • Trial preparation (1)
  • USPAP (2)
  • valuation careers (10)
  • volunteer (1)
  • Volunteers of Distinction (8)

RSS AI News

  • Hybrid Appraisals Can Offer New Opportunities for Appraisers: The Appraisal Journal August 11, 2022
  • Rapid Growth and Influx of New Residents Pushes Austin Affordability to the Limit: Valuation Magazine July 26, 2022
  • New Appraisal Institute Book Shares Advice for Appraisers in Real Estate Arbitration July 7, 2022

RSS Industry News

  • US Needs 4 Million More Apartments by 2035, Research Shows August 3, 2022
  • Federal Reserve Planning More Rate Increases to Curb Inflation August 3, 2022
  • Economy is Slowing, Housing Starts and Home Sales Both Decline, Data Reveals August 3, 2022

Follow us

icon_youtubeicon_linkedinicon_twittericon_rssicon_facebook

About this blog

Opinions of Value provides the appraiser perspective on developments in the valuation profession, insight on legislative and regulatory issues and outlook on industry trends.
Terms of Use | Disclaimer | Guest Blogger Guidelines

Dotcomm Award

Copyright © 2022 · Genesis Child on Genesis Framework · WordPress · Log in