Appraisal myths & facts
Legally, a real estate appraiser is required to be state certified to create substantiated real estate appraisals for federally-backed sales. Also by law, you are entitled to request a copy of the finished appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal process.
Myth: Market value has to be the same as the assessed value of the property.
Fact: It could be that Washington, like most states, supports the idea that the assessed value equates to the market value; however, this is not often the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are perfect examples of why this occurs.
Myth: The value of a home will differ depending upon whether the appraisal is produced for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is ordered.
Myth: Any time market value is established, it should be similar to the replacement cost of the house.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a property without being under influence from any external group to purchase or sell. The dollar amount needed to rebuild a house is what constitutes the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the worth of a home.
Fact: Appraisers complete a full analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: In a powerful economy - when the costs of homes in a given area are found to be appreciating by a certain percentage - the costs of individual properties in the vicinity can be expected to appreciate by that same percentage.
Fact: Any worth at which an appraiser arrives in regards to a particular property is always individualized, based on certain factors pulled from the data of comparable homes and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.
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Myth: The home's exterior is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Fact: Property worth is concluded 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 information from just examining the property from the exterior.
Myth: Because the consumer is the party who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Home buyers have to be provided with a version of the report through request due to the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the necessities of their lender.
Fact: Only if home buyers look over a copy of their appraisal report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, comprised of helpful and often-revealing information - including, but not limited to, 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: There is no reason to order an appraisal unless you are trying to get an estimate of the cost of a house during a sales transaction involving a lending institution.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a lot of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not serve the same purpose as an inspection. The job of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. The purpose of a home inspector is to determine the condition of the home and its main components, then create a report on these findings.