Appraisal myths & facts
By law, an appraiser is required to be state-licensed to offer appraisals for federally-related sales. Also by law, you are entitled to demand a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser will be equivalent to the market value.
Fact: It is possible that Washington, like most states, supports the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Generally when interior remodeling has been done and the assessor is unaware of the improvement or properties in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on if the appraisal is done for the buyer or the seller, the appraised value of the house will vary.
Fact: The value of the house does not affect the pay of the appraiser; as a result, the appraiser has no personal interest in the value of the property. Obviously, he will render services with impartiality and objectivity regardless for whom the appraisal is provided.
Myth: Any time market value is established, it should be the same as the replacement cost of the property.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under pressure to buy or sell. Replacement value is the dollar amount necessary to reconstruct a property in-kind.
Myth: There are specific methods that appraisers use to find the cost of a house, like the price per square foot.
Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the worth of a home, including its location, condition, size, proximity to facilities and recent worth of comparable homes.
Myth: As properties appreciate by a specific percentage - in a strong economy - the houses around the appreciating properties are figured to appreciate by the same amount.
Fact: All increase of worth is on an individual basis, found by data on relevant conditions and the data of comparable homes. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate in King County or Seattle, WA?Contact our professional staff
Myth: Just examining what the house looks like on its exterior gives an excellent idea of its worth.
Fact: House worth is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply inspecting the property from the exterior.
Myth: Since you're the one funding for the appraisal when applying for the loan to purchase or refinance your home, you own the ordered appraisal report.
Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be given it by their lending agency.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the requirements of their lender.
Fact: Only if home buyers examine a copy of their appraisal report can they double-check 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 a great deal of data stored in an report 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 area.
Myth: The only reason someone would hire an appraiser is if a house needs its worth assessed in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: A home inspection report serves a completely different purpose than an appraisal. The purpose of the appraiser is to form an opinion of value in the appraisal process and through producing the report. The task of a home inspector is to assess the condition of the house and its main components, then create a report on these inspection.