July 16th, 2015 
All About Home Appraisals
Want to buy or refinance a home? You’ve got to get an appraisal. However, misconceptions continue to deter many. Let’s lay those to rest, shall we?
Fiction: Assessed Value should equal Market Value.
Fact: This is often not the case, as appraisers and assessors use different methods to arrive at a home’s value.
Fiction: The appraised value of a home will be different depending on whether the appraisal is completed for a buyer or a seller.
Fact: The appraiser is an objective authority, who has no vested interest in the home or property he or she is appraising.
Fiction: A home’s Market Value should equal its Replacement Cost.
Fact: Market value is based on what a buyer will likely pay a seller for a home or property. Replacement cost is the dollar amount required to reconstruct the home or property.
Fiction: A home’s value will rise or fall dependent on the health of the economy and/or the housing market.
Fact: A home or property’s appraised value is dependent on an individualized basis, regarding various aspects of the home or property in question.
Fiction: You can tell what a home or property’s value is simply by looking at the exterior.
Fact: A home’s or property’s value hinges on a number of aspects, including location, improvements, amenities, condition, materials used, age and market trends.
Fiction: Because consumers pay for appraisals, they own their appraisal.
Fact: The appraisal is legally owned by the lender, unless the lender “releases its interest” in the document.
Fiction: Consumers do not need to be concerned with what is in the appraisal document as long as it satisfies the needs of their lending institution.
Fact: Only by reading a copy of their appraisal can consumers double-check its accuracy and question the results.
Fiction: An Appraisal is the same as a home inspection.
Fact: An Appraisal does not serve the same purpose as the home inspection. The Appraiser forms an opinion of value in the appraisal process and resulting report. A home inspector determines the condition of the home and its components, and reports these findings.
Fact: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lender.
Fiction: Hiring an appraiser can fulfill a variety of needs. Appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
By Justin Waybright & Chuck Boggs
