The Truth About Home Appraisals

Ever wonder what the real truth is about home appraisals?  Here a few misconceptions shared by buyers, sellers, lenders and even real estate agents about home appraisals. 

 

The following are common myths about appraisals shared by David Bunton, president of The Appraisal Foundation.

 

1. Myth - A lender and an appraiser cannot communicate before, during or after the appraisal is complete.  

 

Fact:  Not only are lenders permitted to communicate with the lender, they must. Communication is essential for the appropriate exchange of information.

 

2. Myth - The appraiser sets the value of the home.  

 

Fact:  Appraisers do not set the value of the home, nor do they confirm a home's sales price.  Their role is to provide a credible opinion of value that reflects the current market.

 

3. Myth - Appraisers only rely on comparable sales and do not take into consideration the cost to build a home.

 

Fact:  Appraisers do need to take into consideration the cost to build a home, and at times, provide a cost approach to deliver a credible appraisal.  However, because cost does not always equal value, appraisers cannot only look at cost to build a home to provide an opinion of value.  They must perform research and analysis to determine what the marketplace is willing to pay.

 

If you would like to read Mr. Bunton's full article regarding common myths concerning real estate appraisals, go to Facebook.com/Nancy Puder Realtor or NancyPuder.com/blog.

 

Nancy Puder is a real estate broker in Arroyo Grande, CA. with Nancy Puder & Associates. If you have any questions or concerns regarding your own property, contact Nancy at (805)710-2415 or email Nancy@NancyPuder.com.  You may also go to Facebook.com/Nancy Puder Realtor and "like" her page to access other real estate related articles.