Appraisal myths & facts

By law, an appraiser must be state-licensed to offer appraisals for federally-backed sales. You also have the right to request a copy of the completed appraisal report from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Assessed value should always be the same as to market value.

Fact: It is probable that Wisconsin, like most states, supports the suggestion that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an prolonged time.

Myth: The buyer or the seller may have some pull 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 task with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: The replacement cost of the home is always is on par with the market value.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell. Replacement cost is the dollar amount needed to rebuild a house in-kind.

Myth: There are specific methods that appraisers use to find the opinion of value of a property, such as the price per square foot.

Fact: There are many differing ways that an appraiser will use to make a full investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable properties.

Myth: As houses appreciate by a certain percentage - in a strong economy - the houses nearby are expected to increase by the same amount.

Fact: All increase of value is on an individual basis, found by information on relevant considerations and the data of comparable homes. It doesn't matter if the economy is doing well or declining.

Myth: Just examining what the home looks like on the outside gives an idea of its worth.

Fact: Home worth is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived simply by looking at the home from the exterior.

Myth: Since the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the report. However, home buyers have to be provided with a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal document so long as it satisfies the requirements of their lending company.

Fact: It is very important for consumers to look at a copy of their report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored 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.