5 Appraisal Myths
Posted January 20th, 2018
There’s a lot of confusing information out there regarding appraisals. Appraisal groups often do things a little differently, and this can lead to a conflict in information. Many people are unaware that appraisals are one of the most significant steps to buying or selling a home, and even today, the demand has only grown. So, we’ve compiled a list of some of the most common misconceptions in our line of work and hope to impart a little knowledge for anyone currently going through the process. Myth #1 – Appraisers and Inspectors Are the Same Appraisers and Inspectors are not the same despite some job overlapping. While it may seem similar, appraisers and inspectors play two different, yet important roles for your home. An appraiser will view your home regarding lot size, renovations, indoor space, and working order. However, this is to determine an appropriate value so that you can get insurance, sell, etc. An inspector will inspect your home to see if there are any issues that need to be taken care of or updated to be considered livable and things like that. For example, the inspector doesn’t care if you have an attic if it meets safety guidelines; an appraiser will want to know if there is an attic to measure – and if it counts as livable space- adding to your home’s overall worth. Myth #2 – All Home Improvements Are GoodAs much effort and preparation that goes into home improvement, you’d think that it’ll all work out positively for the value of your home, right? Unfortunately, this is not always the case. It is important to consult with contractors and appraisers before doing a home renovation or improvement (if it’s purely for added home value) to make sure you’re on the right track. Many people spend thousands only to find out that there is not a dollar-to-dollar investment being made. This leaves the homeowner out time and money, which can be extremely frustrating. Myth #3 – I Have No Say in My Appraisal As part of an appraiser’s job, there are many things that go into a final evaluation of any home. This can include other home comparables, renovations, space, etc. An appraiser is meant to be a third-party evaluator -they get no compensation for how much or how little the property is worth. As such, they cannot be influenced by the homeowner in their evaluation. That being said, if you have important information about your property or other comparables, it is best to give the information to the appraiser beforehand so that they can determine whether or not it is information that needs to be evaluated. After an appraisal has been completed, you have the right to go over the information. If you feel the appraisal is off, you are also welcome to hire another evaluator to make sure the information is accurate and correct, though this approach is rarely needed. Myth #4 – There Is No Benefit in A Pre-appraisal Each home seller has a different strategy. Some prefer to let the buyers see and make their decisions, others prefer to load their deck, so to speak. A pre-appraisal can help entice buyers. On the other hand, it can give a seller more realistic representations of their home and can help in the event that they decide to make improvements. Think of it as a before and after comparison. A pre-appraisal isn’t for everyone and does contribute to the cost of selling, but it can be helpful for some. Myth #5 – The Lender Will Hire and Pay for the Appraiser In some cases, this is true. However, the more likely scenario is that the lender will hire an appraiser or appraisal group, and the homeowner will be responsible for paying it. Many buyers and sellers will see this included in the closing costs when all is said and done, so there is no single way it’s done. If you have questions about this process, ask your lender for clarification.