Appraisal myths & facts

It is required by law that a real estate appraiser must be state-licensed to produce appraisals for federally-related home sales in Florida. The law gives you the right to receive a copy of your finished report from your lending agency after it has been provided. Contact us if you have any questions about the appraisal process.

Myth: Market value has to be similar to the assessed value of the property.

Fact: It could be that Florida, like most states, validates the common myth that the assessed value is the same as the market value; however, this is not always true. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.

Myth: The buyer or the seller often will have leverage in the cost of the house depending upon for whom the appraiser is working.

Fact: The appraiser has no vested interest in the outcome of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value should equate to replacement cost.

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular property, with neither being under pressure to buy or sell. The dollar amount necessary to reconstruct a house is what forms the replacement cost.

Myth: Appraisers use a formula, such as a specific price per square foot, to come to the value of a house.

Fact: An appraisal report is a collection of information concluded from the property's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can count on Shane Gilbert's staff to be honest in assessing this data.

Myth: In a strong economy - when the values of homes in a given region are found to be appreciating by a certain percentage - the values of individual homes in the area can be expected to increase by that same percentage.

Fact: All appreciation of value is on a case-by-case basis, determined by information on relevant conditions and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.

Myth: You can generally see what a property is worth simply by looking at the exterior.

Fact: To conclude an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. Obviously, none of these variables can be found simply by viewing the property from the outside.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance your house, you own the produced appraisal.

Fact: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the document. Home buyers must be supplied with a version of the appraisal report through request as per the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their report so long as it meets the requirements of their lending institution.

Fact: A consumer should definitely look through their appraisal; there might be some questions or some concerns with the accuracy of the inspection that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an report that will probably be useful to the consumer 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 vicinity.