Appraisal myths & facts
Legally, a real estate appraiser is required to be state certified to perform substantiated appraisal reports for federally-related sales. You have the ability to demand a copy of the finished appraisal report from your lender. Contact us if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser will be the same as the market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Generally when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the area have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller often will have some pull in the cost of the house depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.
Myth: Any time market value is established, it should equate to the replacement cost of the house.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a home without being under pressure from any external party to buy or sell. The dollar amount needed to rebuild a property is what forms the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the cost of a house.
Fact: An appraisal report is an assertion of data concluded from the property's size, location, proximity to certain facilities, the condition of the house and the cost of recent comparable sales. You can rely on Anderson & Associates's staff to be forthright in assessing this data.
Myth: When the economy is on the rise and the cost of houses are found to be rising by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.
Fact: Cost increase of a certain property is always determined on a case-by-case basis, factoring in data on comparable homes and other relevant specifications within the home itself. It makes no difference if the economy is robust or poor.
Have other questions about appraisers, appraising or real estate in Clark County or Ridgefield, WA?Contact us
Myth: You can commonly see what a house is worth simply by looking at the outside.
Fact: To find an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. As you can see, none of these factors can be derived simply by looking at the property from the outside.
Myth: Since the consumer is the person who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Unless a lender releases its interest in the document, it is legally owned by the lending agency that purchased the appraisal. However, home buyers have to be given a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their report so long as it exceeds the necessities of their lending company.
Fact: A home buyer should definitely look through their report; there could be some questions or some concerns with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an appraisal report that could 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 area.
Myth: The only reason someone would hire an appraiser is if a home needs its price estimated in a lender sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and may 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 report is the same as a home inspection report.
Fact: Appraisal reports are definitely not the same as a home inspection report. The reason behind an appraisal report is to find an opinion of fair market value during the appraisal process and the production of the report. House inspectors will produce a report that will show the condition of the home and its major components and possible damage.