4 Misconceptions Associated with Appraisals

Posted by TSI Appraisal

Appraisers excel at interpreting and comparing data in
order to deliver the most current and accurate description of a property. In
turn, this information will help the appraiser determine its value. They dig
deep into the history, condition, age and location of the property and pinpoint
a value that will ensure that the loan amount written by the bank is
appropriate.

 
Appraisers verify sales with the local municipality, and
use Multiple Listing Services (MLS) to see sales reported by real estate
agents. People are often vaguely familiar with what an appraisal is, but still
there are misconceptions when it comes to the appraisal process.
 
Here are four common misconceptions that consumers
believe about appraisals:
 
Misconception #1 – Records pulled from city records
are 100 percent accurate.
As an appraiser is doing their due diligence on a
property, the records are verified by physical measurement and inspection.
Sometimes the information on the listing advertisement may be rounded or may
not have all information required for an appraisal. Most appraisal reports list
the data and verification sources for the physical characteristics of the
property being appraised.
 
Misconception #2 – The appraiser does not have the
best information to support their appraisal decision.
In regards to comparable sale information (also called
comps), the appraiser holds subscriptions to the same listing services that
real estate agents use. This gives the appraiser access to homes that sold,
were listed for sale or were once listed and then taken off the market. As the
information contained in the listing is often generalized, the appraiser takes
this and verifies the data against public records, interviews real estate agents
and even inspects the comps for additional verification. In addition to sale
and listing information, the appraiser will subscribe to building cost
services, real estate rental information services and sometimes paid access to
government municipalities to be able to verify public record information
according to their state licensing standards.
 
Misconception #3 – Online real estate websites always
have accurate information.
On most real estate websites, the actual sale information
is not available to the public, including details of the transaction. Although
this information can be useful to the consumer, the appraiser cannot rely on
the information without having the complete picture. This also can create
confusion for the consumer because often times the information reported by the
appraiser can differ widely from the information that exists on public internet
sites.
 
Misconception #4 – The appraiser must always inspect
the home by walking through it.
As mentioned in a previous blog post on drive-by appraisals, an appraiser isn’t always
mandated to walk around the home. In fact, appraisals can vary in depth
greatly. A full inspection is as detailed as it gets. The appraiser will walk
through each room of the home and inspect the exterior. One the other end of
the spectrum is the drive-by appraisal. It’s the least in-depth appraisal and
can be ordered when a “ball park estimate” is acceptable.
 
Appraisals are incredibly intricate and as complicated as
it can get when it comes to the real estate industry. In today’s world through
leveraging technology and specialization, we have reduced the turn time for a
property appraisal, but this is only the tip of the iceberg when it comes to
the appraisal process. Keep your eyes peeled for a day in the life of an appraiser,
which we will discuss next week.
 
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