Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to produce appraisals for federally-backed purchases. The law allows you to acquire a copy of your finished appraisal report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.
Myth: Assessed value generally will be the same as to market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the cost of the home will vary.
Fact: The appraiser has no vested interest in the result of the report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is found, it should equate to the replacement cost of the home.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside group to purchase or sell. If the property were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: There are specific methods that appraisers use to show the cost of a property, like the price per square foot.
Fact: An appraisal report is an amalgamation of information based on the house's size, location, proximity to some facilities, the condition of the property and the value of recent comparable sales. You can rely on Anderson & Associates's appraisers to be professional in assessing this data.
Myth: When the economy is strong and the cost of properties are reported to be appreciating by a certain percentage, the other houses in the area can be expected to appreciate based on that same percentage.
Fact: All appreciation of worth is on a one-on-one basis, determined by information on relevant conditions and the data of comparable properties. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Clark County or Vancouver, WA?Contact Anderson & Associates
Myth: Just looking at what the property looks like on the outside gives an excellent idea of its worth.
Fact: To find an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. An exterior inspection obviously can't provide all of the data required.
Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance real estate, they own their appraisal.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the report. Consumers must be provided with a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even concern themselves with what the report contains so long as their lender is fine with the contents therein.
Fact: A home buyer should definitely inspect their report; there will probably be some questions or some worries about the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an report 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the worth of a home during a sales transaction involving a lending institution.
Fact: Based upon their qualifications and designations, appraisers can and do provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection report. The reason behind an appraisal is to find an opinion of fair market value during the appraisal process and the production of the appraisal report. A home inspector determines the condition of the building and its main components and reports these findings.