Absolute value inc.



Many times assumptions are made regarding real estate appraisal and property valuation in general.  These assumptions are oftentimes incorrect and misleading to those who would benefit from attaining a professional, licensed/certified real estate appraiser to execute a complete appraisal.


ASSUMPTION: The appraised value of a property will vary, depending upon whether the appraisal

is conducted for the buyer or the seller.
FACT: The appraiser has no vested interest in the outcome of the appraisal and should render

services with independence, objectivity and impartiality.

ASSUMPTION: Appraisers are hired only to estimate real estate property values in property

sales involving mortgage-lending transactions.
FACT: Depending upon their qualifications and designations, appraisers can and do provide a

variety of services, including advice for estate planning, dispute resolution, zoning and tax

assessment review and cost/benefit analysis.


ASSUMPTION: Market value should approximate replacement cost.
FACT: Market value is based on what a willing buyer would likely pay a willing seller for a

particular property, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to reconstruct a property in-kind.

ASSUMPTION: Assessed value should equate to market value.
FACT: While most states support the concept that assessed value approximates estimated

market value, this often is not the case. Situations in which interior remodeling has occurred and

the assessor is unaware of the improvements; or when properties in the vicinity have not been reassessed for an extended period, often result in a higher market value.


ASSUMPTION: Appraisers use a formula, such as a specific price per square foot, to figure out

the value of a home.
FACT: Appraisers make a detailed analysis of all factors pertaining to the value of a home

including its location, condition, size, proximity to facilities and recent sale prices of comparable properties in the subject market area.

  ASSUMPTION: Because consumers pay for appraisals when applying for loans to purchase or

  refinance real estate, they own their appraisal.

  FACT: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its

  interest" in the document. However, consumers may obtain a copy of the appraisal report from

  their lender who had ordered the report under the Equal Credit Opportunity Act.

  ASSUMPTION: In a robust economy - when the sales prices of homes in a given area are

  reported to be rising by a particular percentage - the value of individual properties in the area can

  be expected to appreciate by that same percentage.

  FACT: Value appreciation of a specific property must be determined on an individualized basis,

  factoring in data on comparable properties and other relevant considerations. This is true in good

  times as well as bad.

  ASSUMPTION: Consumers need not be concerned with what is in the appraisal document so

  long as it satisfies the needs of their lending institution.

  FACT: Only if consumers read a copy of their appraisal can they double-check its accuracy and

  question the result. Also, it makes a valuable record for future reference, containing useful and

  often-revealing information - including 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.

  ASSUMPTION: An Appraisal is the same as a home inspection.

  FACT: An appraisal does not serve the same purpose as an inspection. The Appraiser forms an

  opinion of value during the appraisal process and in the resulting report. A home inspector

  determines the condition of the home and its major components and reports these findings.

  ASSUMPTION: You generally can tell what a property is worth simply by looking at the outside.

  FACT: Property value is determined by a number of factors, including location, condition,

  improvements, amenities and market trends.

     appraisal facts

Absolute Value, Inc.
745 Atlantic Avenue, 8th Floor

Boston, MA 02111

(p) 617.391.0000 (f) 617.507.7909


orders@absolutevalueinc.com
www.absolutevalueinc.com

 

Placing the utmost importance on 

  client service and appraiser expertise.