Appraisal myths debunked
It is mandated by law that a real estate appraiser is required to be state-licensed to perform appraisals for federally-supported real estate purchases in Washington. The law allows you to acquire a copy of your completed report from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.
Myth: Market value should be similar to the assessed value of the property.
Fact: While most states support the idea that assessed value approximates estimated market value, this often is not the case. There are times when interior remodeling has been done and the assessor is unaware of the improvement or properties in the area have not been reassessed for years or more, it may vary wildly.
Myth: The buyer or the seller sometimes may have impact in the cost of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the result of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is established, it should equal the replacement cost of the home.
Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under pressure to buy or sell. Replacement value is the dollar amount needed to reconstruct a home in-kind.
Myth: There are specific ways that appraisers use to find the opinion of value of a property, like the price per square foot.
Fact: Appraisers complete a detailed analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: In a strong economy - when the costs of properties in a given region are reported to be increasing by a certain percentage - the worth of individual homes in the area can be expected to rise by that same percentage.
Fact: Any cost at which an appraiser concludes in regards to a particular home is always personalized, based on certain factors derived from the information of comparable homes and other considerations within the house itself. This is true in excellent economic times as well as poor.
Have other questions about appraisers, appraising or real estate in King County or Seattle, WA?Contact us
Myth: Just examining what the property looks like on the outside gives an idea of its value.
Fact: Home value is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by examining the house from the outside.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their property, they own their appraisal report.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be supplied with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even care about what the report contains so long as their lending institution is satisfied.
Fact: A home buyer should definitely inspect their report; there could be some questions or some worries with the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, comprised of helpful and often-revealing data - including, but not limited to, 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender-based sales transaction.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Fact: An appraisal does not serve the same purpose as an inspection. The function of an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the report. House inspectors will write a report that will determine the condition of the property and its major components and possible damage.