Common myths about appraising

It is mandated by legal agencies that a real estate appraiser must be state-licensed to write appraisal reports for federally-supported property sales in Nevada. You also have the right to demand a copy of the finished report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.

Myth: The value that is assessed by the appraiser must be the same as the market value.

Fact: It could be that Nevada, like most states, validates the idea that the assessed value equates to the market value; however, this is not often the case. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.

Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the opinion of value of the property will vary.

Fact: The appraiser has no vested interest in the outcome of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value should be the same as replacement cost.

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. Replacement cost is the dollar amount needed to rebuild a house in-kind.

Myth: There are certain ways that real estate appraisers use to determine the cost of a house, like the price per square foot.

Fact: There are many numerous calculations that an appraiser will use to make a full analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable houses.

Myth: When the economy is doing well and the sales prices of houses are found to be appreciating by a certain percentage, the other homes in the proximity can be expected to rise based on that same percentage.

Fact: Cost increase of a specific house is always concluded on an individualized basis, factoring in data on comparable homes and other relevant elements. It makes no difference if the economy is robust or on the decline.

Myth: You can commonly tell what a home is worth simply by looking at the exterior.

Fact: There are a multitude of different variables that conclude property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by examining the property from the exterior.

Myth: Since you're the one funding for the appraisal when applying for the loan to purchase or refinance your house, you own the produced appraisal report.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be given it by their lending company.

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

Fact: A consumer should definitely read through their document; there may be some questions or some worries about the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal report that will probably be useful to the home buyer in the future, such as 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 proximity.