Appraisal myths debunked
By law, an appraiser needs to be state-licensed to produce appraisals for federally-supported transactions. The law entitles you to get a copy of your finished report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value should always be similar to to market value.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby homes are exact examples of why the price can vary.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the opinion of value of the property will vary.
Fact: There is no vested interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is created.
Myth: Market value should approximate replacement cost.
Fact: Without any suggestion from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house. The replacement cost is the dollar amount required to rebuild a house in-kind.
Myth: There are certain methods that appraisers use to find the cost of a home, such as the price per square foot.
Fact: Appraisers make a detailed analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: In a robust economy - when the worth of properties in a given region are found to be rising by a particular percentage - the worth of individual properties in the area can be expected to increase by that same percentage.
Fact: Cost increase of a certain home is always concluded on a case-by-case basis, factoring in data on comparable houses and other relevant specifications within the home itself. It makes no difference whether the economy is robust or terrible.
Have other questions about appraisers, appraising or real estate in King County or Seattle, WA?Contact us
Myth: The house's exterior is determinate of the actual price of the property; there is no need to do an interior appraisal.
Fact: Property value is determined by a multitude of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived just by looking at the house from the exterior.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their home, they legally own their appraisal report.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. By the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given one by their lender.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lending company.
Fact: A consumer should definitely inspect their appraisal; there could be some questions or some worries with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal report that should be useful to the consumer in the future, such as the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the region.
Myth: Appraisals are ordered only to estimate home values in house sales involving mortgage-lending transactions.
Fact: Based upon their qualifications and designations, appraisers can and do provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection report. The reason behind an appraisal is to form an opinion of fair market value during the appraisal process and the production of the report. The purpose of a home inspector is to find the condition of the property and its major components, then provide a report on these findings.