Common myths about appraising

It is mandated by law that a real estate appraiser is required to be state-licensed to write appraisals for federally-supported real estate sales in Wisconsin. Also by law, you are entitled to receive a copy of the completed appraisal report from your lending agency. Contact us if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser will be the same as the market value.

Fact: It is probable that Wisconsin, like most states, validates the common myth that the assessed value equates to the market value; however, this is not always true. Often when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the area have not been reassessed for quite a while, it may vary wildly.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the cost of the home will vary.

Fact: There is no vested interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is written.

Myth: The replacement cost of the house will be is on par with the market value.

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific house, with neither being under duress to buy or sell. The dollar amount demanded to reconstruct a home is what shows the replacement cost.

Myth: Specific methods, like the price per square foot, are the methods appraisers use to ascertain the worth of a home.

Fact: Appraisers make an exhaustive analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent worth of comparable houses.

Myth: When the economy is robust and the cost of houses are reported to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to increase based on that same percentage.

Fact: Any price at which an appraiser arrives in regards to a particular property is always personalized, based on certain factors concluded from the data of comparable properties and other considerations within the home itself. It doesn't matter if the economy is on the rise or declining.

Have other questions about appraisers, appraising or real estate in Racine County or Sturtevant, WI?

Contact A & B Tax Service

Myth: You can often tell what a house is worth simply by looking at the exterior.

Fact: To find an accurate price beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from simply inspecting the property from the outside.

Myth: Considering that the consumer is the party who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Consumers must be provided with a version of the document upon written request because of the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even concern themselves with what the report contains so long as their lender is fine with the contents therein.

Fact: It is very important for consumers to peruse a copy of their report so that they can double-check the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, containing useful and often-revealing information - including, but 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.

Myth: The only reason someone would hire an appraiser is if a property needs its value assessed in a lender sales transaction.

Fact: Based upon their qualifications and designations, appraisers can and will provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: An appraisal does not serve the same purpose as an inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. A home inspector assesses the condition of the building and its main components and reports their findings.