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A home appraisal is simply an opinion of value. Here are some of the myths vs. realities of appraisals.

Appraisals are an infrequent experience for most consumers, who consequently tend to have some misconceptions about the process and the results. Here are some of myths and facts:

Myth: If I have 3 appraisers appraise my home, all 3 will give me the same value.

Fact: It is unlikely that even if you had 10 appraisers do your home you would find them all to show the same value. While there are specific standards, variations come from which homes the appraiser uses as comps. If you are in an urban area with lots of similar homes and re-sales, the values should all be close. If you are in a rural area, it may be harder to find comps, thus the values can differ.

Myth: The primary purpose of an appraisal is to make sure the buyer doesn't pay too much for the house.

Fact: An appraisal provides valuable information for the buyer and the seller, but the appraiser's primary mission is to protect the lender. Lenders don't want to lend out more on a property than what "sane" buyers would pay for it. That's why the appraisal takes place before the lender grants final approval of the buyer's loan.

An appraisal is based on three approaches - market value, income and cost. The market value is based on comparable homes in the area. the income approach is used for income producing properties and the cost approach looks at what it would cost to rebuild the property less a depreciation allowance.

Fact: Appraisers weigh the location of the home, its proximity to desirable schools and other public facilities, the size of the lot, the size and condition of the home itself and recent sales prices of comparable properties, among other factors. They also look at specific amenities such as a garage, finished basement, extra bedroom or bathroom and others to determine your home's value. An appraisal will also include a description of the neighborhood, plus include pictures of 3 comparable houses.

Myth: Good housekeeping can improve a home's valuation.

Fact: Appraisers aren't interested in dirty dishes or dusty dressers, but they do notice such signs of neglect as cracked walls, chipped paint, broken windows, torn carpets, damaging flooring and inoperable appliances.

Myth: I just spent $30,000 on a new garden, swimming pool and new kitchen. My home's value will now be $30,000 higher than it was before I made these improvements.

Fact: Spending money on cosmetic improvements will not give you a dollar-for-dollar return on your investment. You may only experience a 25% or less increase from making these types of improvements.

Myth: Anyone who has a clipboard and business cards can be an appraiser.

Fact: Federal law requires states to establish minimum standards and licensing practices for real estate appraisers. In California, for example, trainees must take several courses, pass an examination and complete 2,000 hours of supervised experience. There are organizations such as the National Association of Real Estate Appraisers, and others, that have their own standards.

Fact: If the buyer is applying for a mortgage that will be insured by the Federal Housing Administration (FHA), the appraiser must survey the physical condition of the home and disclose potential problems to the buyer. No such obligation exists for non-FHA mortgages, which make up most of the mortgages issued.

Myth: An appraisal is identical to a home inspection.

Fact: The new FHA disclosure requirement notwithstanding, an appraisal is not a substitute for a professional home inspection. The appraiser formulates an opinion of the property's value for the lender, while the inspector educates the buyer about the condition of the home and its major components.

Myth: If the appraiser's opinion of value is lower than the purchase price, the buyer won't be able to purchase the home.

Fact: A transaction can sometimes survive a "low" appraisal if the seller reduces the purchase price, the buyer makes a hefty down payment or a separate escrow account is set up to fund repairs that will increase the value of the home. On rare occasions, an appraiser will reconsider his or her opinion if new evidence supports a higher valuation

I hope that this article helps you better understand what an appraisal is and is not. An appraiser can not over value a home just to get to a number that you or a buyer needs. This is considered fraud and can result in prosecution of all parties involved.

For help on getting a competent appraiser, call my office.

About My Services

I would like to help you with the task of marketing your home. To do this, I am able to do the following for you:

• Create a Property Information Sheet to give to visitors
• Assist you with the various forms of internet advertising
• Help you use the online services to get an idea of what your home is worth.
• Be available when you have an Open House to help greet prospective buyers
• Help explain the various financing options your buyers have
• Pre-qualify any buyer who has not yet talked with a mortgage company
• Obtain a loan commitment from our network of lenders
• Determine any seller assist that a prospective buyer may need
• Co-ordinate all aspects of settlement or escrow, including title search, appraisal, paperwork and other services

At Your Company Name, we offer mortgages for most buyers, including ones who are self-employed or who have damaged credit. We have lenders who offer 100% financing meaning no down payment for qualified buyers.

We also offer mortgages with start rates as low as 1%, making it easier to get a buyer into your home.

If you have any questions about how I can help you sell your home, please call me at Company Phone #.