Appraisal myths debunked
It is enforced by the government that a real estate appraiser must be state-licensed to offer appraisal reports for federally-supported real estate sales in Washington. You also have the right to demand a copy of the completed report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser will be the same as the market value.
Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this generally is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an extended time.
Myth: The opinion of value of a house will change depending upon if the appraisal is produced for the buyer or the seller.
Fact: The appraiser has no personal interest in the outcome of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the home should be is on par with the market value.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain home, with neither being under undue influence to buy or sell. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the worth of a house.
Fact: Appraisers complete a full analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent costs of comparable properties.
Myth: As houses increase their worth by a certain percentage - in a robust economy - the homes within the same neighborhood are figured to appreciate by the same amount.
Fact: All appreciation of value is on an individual basis, determined by information on relevant conditions and the data of comparable properties. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Clark County or Vancouver, WA?Contact our professional staff
Myth: Just examining what the property looks like on the outside gives an excellent idea of its worth.
Fact: Property worth is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just examining the home from the outside.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their home, they legally own their appraisal.
Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with it by their lending company.
Myth: There's no point for home buyers to even concern themselves with what the appraisal report contains so long as their lending company is fine with the contents therein.
Fact: It is a very good idea for consumers to look at a copy of their appraisal report so that they can double-check the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal that will probably 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: Appraisals are ordered only to estimate real estate property values in property sales involving mortgage-lending transactions.
Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is the same as a home inspection report.
Fact: An appraisal report does not serve the same purpose as an inspection report. The function of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector analyzes the condition of the house and its major components and reports their findings.