Common myths about appraising

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related transactions. Also by law, you have the right to receive a copy of the finished appraisal report from your lending agency. Contact us if you have any concerns about the appraisal procedure.

Myth: Market value will be the same as the assessed value of the property.

Fact: It could be that Washington, like most states, validates the idea that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.

Myth: Depending on whether the appraisal is written for the buyer or the seller, the appraised value of the house will vary.

Fact: There is no real interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is created.

Myth: Any time market value is found, it should equate to the replacement cost of the property.

Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. The replacement cost is the dollar amount necessary to reconstruct a property in-kind.

Myth: There are certain ways that appraisers use to find the value of a property, such as the price per square foot.

Fact: An appraisal report is an amalgamation of information concluded from the property's size, location, proximity to specific facilities, the condition of the property and the value of recent comparable sales. You can rely on Sound Appraisal Group, Inc's staff to be forthright in assessing this data.

Myth: As houses appreciate by a certain percentage - in a robust economic state - the homes within the same neighborhood are expected to increase by the same amount.

Fact: All increase of worth is on a one-on-one basis, determined by data on relevant conditions and the data of comparable properties. It makes no difference if the economy is powerful or poor.

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Myth: You can often tell what a home is worth simply by looking at the exterior.

Fact: Property worth is concluded by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived just by viewing the property from the outside.

Myth: Because the consumer is the one who provides the money 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 appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be provided with one by their lender.

Myth: There's no point for consumers to even concern themselves with what the appraisal contains so long as their lending agency is fine with the contents therein.

Fact: A home buyer should definitely read through their appraisal report; there will probably be some questions or some concerns with the accuracy of the inspection that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored in an appraisal 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: Appraisers are hired only to assess home values in house sales involving mortgage-lending transactions.

Fact: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: There's no reason to get an appraisal if you get a home inspection.

Fact: An appraisal report does not serve the same purpose as an inspection report. The purpose of the appraiser is to find an opinion of value in the appraisal process and through creating the report. House inspectors will produce a report that will show the condition of the home and its major components and possible damage.