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 likely would 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 approximate estimated
market value, this often is not the case. Examples include when 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.

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 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: 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, PMI removal and cost/benefit analysis.

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 in the Appraisal process and 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