• Toni F. Ryan

5 Myths About Home Values in California

During periods of economic growth, home values typically go up and most homeowners do not question appraisals. Conversely, in times of turmoil when property values are declining, home-sellers naturally question appraisal values.

The actual appraisal process has changed very little over the course of the housing boom and bust cycle but since the topic of home values seems to be a hot discussion, let's address the top five appraisal myths/questions. Appraisal Myths:

Myth #1- Appraisal values are based upon a simple formula that uses dollar per square foot and comparable sales prices.

Reality - There are several factors the affect the value of a property which include comparable sales prices, location, amenities, exterior and interior condition, maintenance, lot size, bed and bath count, traffic and much more.  There is no simple formula.

Myth #2 -  A clean house appraises higher.

Reality - Appraisers do not care if your laundry is on the floor or dirty dishes in the sink. They notice maintenance issues like peeling paint, holes in flooring, etc. but the mess does not affect value. However, iIf there is a mess large enough so that the appraiser cannot see the floors or the walls, then it is a good idea to clean up.

Myth #3 - Telling the Appraiser the value you want means they will try to hit that value.

Reality - The first and foremost rule for the appraisal is that it is an UNBIASED report of value. Appraisers must act independently of the owner and the lender which better serves both parties. There have been strict guidelines put in place since the 2008 meltdown that do not allow the appraiser to discuss value with the borrower.

Myth #4 - The value of the home appraisal reflects the dollar for dollar value of recent improvements.

Reality - Rarely. Some improvements increase the value of the property while other improvements are the owner's preference. The appraised value is mainly based upon how your home compares with the homes that have sold recently in your area rather than on a list of improvements.

Myth #5 - An appraiser always uses the most recent closest sales, regardless of the term of the sale.

Reality - Only if necessary. If there are enough standard sales, meaning not a foreclosure or short sale, then we use those and avoid the REO sales as they are not often the best representation of the market. However, if we must use the REO sales, then we will adjust the REO sale by a percentage.  Many times when an REO sales Is used it is one of 5 comparables and carries less weight for the value.

Keep in mind that an appraiser is looking at several things when determining the value of a property. Your mortgage professional can run comparable sales to give you a better idea of the value range of your property before you proceed with the cost of the appraisal.


Toni F. Ryan | NMLS#230507

Senior Loan Officer | Synergy One Lending

Toni F. Ryan has over 20 years experience in mortgage lending - both on the wholesale and retail levels. She believes that education is key to making the best decision for YOU! She shares her insight into the lending world here and encourages your feedback. Don't forget to connect on Facebook!

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The information contained herein is for informational purposes and should not be construed as personal advice. Please consult your mortgage professional BEFORE making any changes to your financial profile. No guarantees or promises are expressed and by visiting this site, you agree to not hold Toni F. Ryan or Synergy One Lending responsible for any decisions you make based on the information stated. All of the content here is the sole property of ToniRyan.com and cannot be duplicated without express written consent. If you choose to reference this material - please include a link to the source and state the authorship clearly.Synergy One Lending is licensed by the California Department of Business Oversight under the California Residential Mortgage Lending Act, Synergy One Lending Inc. NMLS 1025894. 3131 Camino Del Rio N 190, San Diego, CA 92108

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Direct/Text (530) 305-7668  |  tryan@S1L.com

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(530) 305-7668

Synergy One Lending Inc., NMLS 1025894. 3131 Camino Del Rio N 190, San Diego, CA 92108. Alabama Consumer Credit License #22123; Arizona Mortgage Banker License 0926603; Arkansas Combination Mortgage Banker/Broker/Servicer License 109250; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act – California License 4131356; District of Columbia Mortgage Dual Authority License MLB1025894; Hawaii Mortgage Loan Originator Company License #HI-1025894; Illinois Residential Mortgage Licensee #MB.6761115; Maine Supervised Lender License 1025894; Maryland Commissioner of Financial Regulation - Mortgage Lender License 21678; Minnesota Residential Mortgage Originator Exemption #MN-OX-1025894; Nevada Mortgage Broker License #4317. Licensed by the New Hampshire Banking Department 19926-MB; Licensed by the New Jersey Banking and Insurance Department – New Jersey Residential Mortgage Lender License 1025894; New Mexico Mortgage Loan Company License 1025894; Oregon Mortgage Lending License ML- 5208; Rhode Island Lender License #20163229LL. Rhode Island Loan Broker License #20163230LB; Vermont Lender License 6891. Washington Consumer Loan Company License CL-1025894. Toll Free #: (877) 978-1922. Subject to Credit Approval. www.nmlsconsumeraccess.org


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