The home appraisal industry is muddied with myths. Which is why our team here at For What It’s Worth Appraisals wants you to understand the truths of appraisals to save you from making misguided decisions. Here are some common myths and counterfacts to set the record straight.
Myth: Appraisals are just educated guesses
Fact: Appraisals are definitely not just guesses. A professional appraiser uses a precise, systematic approach, complete with standardized methods and deep market analysis to determine the value of a property. We are trained to master this process that includes examining comparables, understanding market trends, and considering unique attributes of each home that is being appraised. It’s a formula that is a fusion of science and experience, not mere guesswork.
Myth: An appraisal determines a home’s sale price
Fact: A home appraisal provides an accurate estimate of its value at a given time, but it does not solely determine the sale price. In real estate, market dynamics, buyer demand, and a real estate agent’s negotiation skills can all influence the final sale price, which could slightly differ from the appraised value.
Myth: Appraisals are the same as home inspections
Fact: This myth is a common misconception. An appraisal evaluates the value of a property by considering factors like location, condition, and market trends. While a home inspection examines the condition of the property’s features, systems, and structure, looking for defects or issues. Both serve significant, albeit different, purposes in the homebuying process.
Myth: Higher renovation costs guarantee a higher appraisal
Fact: Renovations can impact an appraisal for a higher price, but they don’t always lead to a dollar-for-dollar increase in value. A higher value appraisal depends on a few factors: the quality of the work, the necessity (and type) of the renovations, market trends, and local buyer preferences. Keep in mind that not all upgrades and renovations are equal.
Myth: Appraisers set the value to match the sale price
Fact: No. Appraisers are bound by a strict code of ethics and professional standards. Our job and mission is to provide an impartial, objective estimate of value, not to align with sale prices or loan amounts. Our appraisal assessment is based on collected data, analysis, and professional judgment.
Myth: Appraisal values remain constant
Fact: A home appraisal is very time-sensitive. Market conditions, economic trends, and other external factors can lead to fluctuations in value over time. An appraisal provides a snapshot of value at a specific point in time and may not hold in the future, which is why it’s so crucial in the homebuying process.
Understanding appraisal myths and facts like these can empower you to navigate the home appraisal process more effectively, whether you’re buying, selling, or insuring your assets. If you need an appraisal, contact our professional appraisal team to schedule an appointment at 843-808-1533.
