Appraisal myths debunked
By law, an appraiser must be state-licensed to perform appraisals for federally-related purchases. You also have the right to receive a copy of the completed appraisal report from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser must be equivalent to the 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 occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period of time.
Myth: The appraised value of a property will vary depending upon whether the appraisal is provided for the buyer or the seller.
Fact: The appraised value of the home does not affect the salary of the appraiser; due to this, the appraiser has no personal interest in the cost of the property. Obviously, he will provide business with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular home. Replacement value is the dollar amount required to reconstruct a home in-kind.
Myth: Appraisers use a calculation, such as a specific price per square foot, to arrive at the cost of a house.
Fact: Appraisers make a comprehensive analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent costs of comparable homes.
Myth: When the economy is on the rise and the value of homes are reported to be increasing by a certain percentage, the other properties in the area can be expected to rise based on that same percentage.
Fact: Any cost at which an appraiser concludes concerning a specific home is always personalized, based on certain factors pulled from the data of comparable homes and other considerations within the house itself. This is true in strong 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 looking at what the home looks like on its exterior gives an idea of its worth.
Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from just looking at the home from the exterior.
Myth: Since the consumer is the one who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the document. Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be given one by their lender.
Myth: Consumers need not be concerned with what is in their appraisal report so long as it exceeds the needs of their lending agency.
Fact: It is a very good idea for home buyers to read a copy of their appraisal so that they can double-check 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 wealth of data contained in an report that could 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 property during a sales transaction involving a lender.
Fact: Based upon their qualifications and designations, appraisers can and will provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: Appraisal reports have almost nothing in common with a home inspection. The point of an appraisal report is to arrive at 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 house and its major components and reports their findings.