There are so many myths about real estate appraisals. Therefore, we are laying out the myths and facts about real estate appraisals here in our latest blog. Real estate property value is unique to each property. The appraiser relies on general expertise and specific research to arrive at an opinion of value. Most consumers have little experience with appraisals, which makes them have some misconceptions about the whole process and results.
Appraisal Myths and Facts
Myth: The purpose of an appraisal is to make sure the buyer doesn’t pay too much.
Fact: Appraisals provide information for the buyer and seller. However, the primary mission of an appraisal is to protect the lender.
Myth: A specific formula is used in appraisals, like price per square foot.
Fact: All information is taken into consideration. The size of the lot, the location, the condition of the home, recent sales prices of comparable properties and more is taken into consideration when appraising a home.
Myth: Good housekeeping will increase the home’s value.
Fact: The cleanliness of the home has nothing to do with the final appraisal. They look for neglect, such as cracked walls, chipped paint, broken windows, bad carpeting, damaged flooring and appliances that are inoperable.
Myth: Anyone can be an appraiser.
Fact: Federal law requires states to establish standards for licensing real estate appraisers. Most states require several courses, passing an exam and several hours of supervised experience.
Myth: Appraisers don’t have to reveal home defects to the buyers.
Fact: The appraiser must disclose to the buyer potential problems if the buyer is applying for a mortgage that will be insured by the Federal Housing Administration. For non-FHA mortgages, this obligation does not exist. A home inspection will also let the buyer know what potential problems the home may have.
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