Appraisal myths & facts

It is mandated by legal agencies that a real estate appraiser must be state-licensed to create appraisals for federally-supported home transactions in Illinois. Also by law, you are allowed to request a copy of the finished report from your lender. Contact us if you have any questions about the appraisal procedure.

Myth: Market value will be the same as the assessed value of the property.

Fact: It is probable that Illinois, like most states, supports the common myth that the assessed value is the same as the market value; however, this is not often the case. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended period.

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

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

Myth: Any time market value is found, it should equate to the replacement cost of the house.

Fact: Market value is based on what a willing buyer would likely pay a willing seller for a specific home, with neither being under undue influence to buy or sell. Replacement value is the dollar amount required to reconstruct a home in-kind.

Myth: Specific methods, such as the price per square foot of the property, are the ways appraisers use to arrive at the worth of a home.

Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.

Myth: When the economy is doing well and the worth of houses are found to be rising by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.

Fact: Any price at which an appraiser arrives concerning a particular house is always individualized, based on certain factors concluded from the data of comparable properties and other specifications within the property itself. It makes no difference whether the economy is strong or poor.

Myth: The property's outside is determinate of the actual value of the home; it is unnecessary to do an interior inspection.

Fact: To find an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. An external inspection certainly can't provide all of the data needed.

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

Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be given one by their lending company.

Myth: There's no reason for home buyers to even worry about what the report contains so long as their lending agency is fine with the contents therein.

Fact: It is a very good idea for home buyers to read a copy of their report so that they can verify the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, as it contains a great deal of data - including, but certainly not limited to 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 area.