Appraisal myths & facts
Legally, a real estate appraiser must be state certified to perform substantiated appraisal reports for federally-backed sales. The law allows you to acquire a copy of your completed appraisal from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Market value needs to be the same as the assessed value of the property.
Fact: While most states support the idea that assessed value approximates estimated market value, this often is not the case. Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are prime examples of why the price can vary.
Myth: The buyer or the seller can have leverage in the cost of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the result of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is found, it should equal the replacement cost of the property.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular house, with neither being under undue influence to buy or sell. Replacement value is the dollar amount necessary to reconstruct a property in-kind.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the value of a property.
Fact: An appraisal report is an assertion of information based on the home's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can depend on Crest Appraisal Services's staff to be ethical in assessing this information.
Myth: When the economy is doing well and the sales prices of homes are reported to be appreciating by a certain percentage, the other houses in the area can be expected to appreciate based on that same percentage.
Fact: All increase of price is on a case-by-case basis, concluded by data on relevant considerations and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in King County or Seattle, WA?Contact Crest Appraisal Services
Myth: Just examining what the house looks like on the outside gives an excellent idea of its value.
Fact: There are a multitude of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data necessary.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance your home, you own the ordered appraisal report.
Fact: Unless a lender releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. Consumers must be provided with a copy of the report through request due to the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even worry about what the appraisal contains so long as their lending agency is fine with the contents therein.
Fact: Only if home buyers read a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal that can be useful to the home buyer 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its cost estimated in a lender sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and will perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal. The function of an appraisal is to find an opinion of fair market value during the appraisal process and the production of the appraisal report. A home inspector determines the condition of the home and its major components and reports their findings.