Myths & Facts of Home Appraisals

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 enjoy owning overpriced property, so that is why the appraisal takes place before the lender grants final approval of the buyer's loan.

Myth: Appraisers have no obligation to reveal home defects to buyers.

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.

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, damaged flooring and inoperable appliances.

Myth: Appraisers use a specific formula (e.g., price per square foot) to figure out exactly how much each home is worth.

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.