Appraisal myths debunked

Legally, an appraiser must be state certified to produce substantiated appraisal reports for federally-related purchase. Also by law, you have the right to receive a copy of the finished appraisal report from your lender. Contact Anderson & Associates if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser will be the same as the market value.

Fact: It might be that Washington, like most states, validates the common myth 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 prime examples of why there might be a differential in price.

Myth: The buyer or the seller will have leverage in the value of the property depending upon for whom the appraiser is working.

Fact: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is conducted.

Myth: Any time market value is found, it should equal the replacement cost of the house.

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house. Replacement value is the dollar amount necessary to rebuild a property in-kind.

Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the cost of a house.

Fact: An appraisal report is an assertion of data based on the home's size, location, proximity to certain facilities, the condition of the house and the value of recent comparable sales. You can rely on Anderson & Associates's staff to be professional in assessing this information.

Myth: In a robust economy - when the costs of properties in a given area are found to be appreciating by a certain percentage - the costs of individual homes in the area can be expected to rise by that same percentage.

Fact: Any cost at which an appraiser concludes concerning a particular house is always personalized, based on certain factors pulled from the information of comparable properties and other specifications within the house itself. It makes no difference if the economy is powerful or on the decline.

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Myth: The house's outside is determinate of the actual price of the house; there is no need to do an interior appraisal.

Fact: Home worth is concluded by a number of variables, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply examining the house from the outside.

Myth: Considering that the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal report. Consumers must be given a version of the report through request due to the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the needs of their lender.

Fact: A consumer should definitely look through their appraisal; there might be some questions or some concerns about the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing a great deal of data - 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 proximity.

Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending company.

Fact: Appraisers can have many different qualifications and designations which allow them to perform a series of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: A home inspection serves a completely different purpose than an appraisal report. The purpose of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the report. The task of a home inspector is to find the condition of the property and its main components, then write a report on their findings.