Appraisal myths & facts
By law, an appraiser needs to be state-licensed to perform appraisals for federally-backed sales. The law entitles you to receive a copy of your completed appraisal report from your lending agency after it has been provided. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: Assessed value should be similar to to market value.
Fact: While most states back the suggestion that assessed value approximates estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an prolonged time.
Myth: Depending on if the appraisal is done for the buyer or the seller, the opinion of value of the property will vary.
Fact: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.
Myth: Market value will equate to replacement cost.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under undue influence to buy or sell. If the property were rebuilt, the dollar amount necessary to do so would be the replacement cost.
Myth: There are specific methods that appraisers use to determine the value of a property, such as the price per square foot.
Fact: There are many differing formulae that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable houses.
Myth: In a strong economy - when the prices of houses in a given region are found to be rising by a particular percentage - the worth of individual houses in the area can be expected to rise by that same percentage.
Fact: All appreciation of price is on a one-on-one basis, found by information on relevant elements and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Kitsap County or Silverdale, WA?Contact us
Myth: The house's exterior is determinate of the actual price of the home; it is unnecessary to do an interior inspection.
Fact: Property worth is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived just by looking at the property from the outside.
Myth: Since the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Fact: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the report. By the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be given it by their lending agency.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the requirements of their lender.
Fact: It is very important for consumers to check over a copy of their report so that they can verify the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in an report that can 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 order an appraisal is if a property needs its value estimated in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a series 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: A home inspection report serves a completely different purpose than an appraisal report. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the report. The purpose of a home inspector is to find the condition of the house and its main components, then provide a report on these inspection.