Myths and Facts about Appraisals

Real estate appraisals, or valuations, are the subject of much debate and speculation due to the main fact that they are not performed that often. Each appraisal is different and usually the appraiser will use his or her expertise, specifications and judgment to arrive at a value price that represents true market value.

Separate Myth From Reality

Because of these facts appraisals are full of myths that lead to misunderstandings and sometimes confrontation. The first major myth is that the primary purpose of an appraisal is to make sure the buyer doesnt pay too much for the house. This is not true. The actual fact is that an appraisal provides valuable information for the buyer and the seller, however the appraisers primary mission is to protect the lender.

Another common myth is that appraisers use a specific formula to work out exactly how much each home is worth. This again is false, with the real answer being that the appraiser weighs up certain criteria including location, proximity to desirable schools, and condition of the home and recent sales prices of comparable properties, to arrive at an answer

More Myths

Some people believe thatgood housekeeping can improve a homes valuation, but this is in fact inaccurate as they are actually looking for signs of neglect and not dirty dishes.

Becoming an appraiser is not as easy as people assume, as Federal law requires states to establish minimum standards and licensing practices for real estate appraisers.

Other myths include ideas that appraisers have no obligation to reveal home defects to buyers and that an appraisal is identical to a home inspection. Each of these myths is false.