Appraisal myths & facts
Legally, an appraiser needs to be state certified to create substantiated real estate appraisals for federally-supported purchase. You are also entitled by law to request a copy of the finished report from your lending agency. Contact Crest Appraisal Services if you have any concerns about the appraisal process.
Myth: Market value should be similar to the assessed value of the property.
Fact: It could be that Washington, like most states, validates the common myth that the assessed value equates to the market value; however, this is not always true. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an extended period of time.
Myth: The appraised value of a home will vary depending upon if the appraisal is conducted for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is written.
Myth: Market value will approximate replacement cost.
Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. Replacement value is the dollar amount needed to rebuild a house in-kind.
Myth: Certain methods, such as the price per square foot of the property, are the ways appraisers use to arrive at the value of a property.
Fact: Appraisers make an exhaustive analysis of all factors pertaining to the price of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: When the economy is doing well and the worth of properties 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 value at which an appraiser concludes concerning a particular house is always personalized, based on certain factors pulled from the information of comparable properties and other considerations within the property itself. It makes no difference whether the economy is good or poor.
Have other questions about appraisers, appraising or real estate in King County or Seattle, WA?Contact Crest Appraisal Services
Myth: You can commonly tell what a home is worth simply by looking at the outside.
Fact: There are a multitude of different variables that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information needed.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their house, they own their appraisal report.
Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal. By the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be given one by their lending agency.
Myth: Home buyers need not care about what is in their appraisal report so long as it exceeds the necessities of their lending institution.
Fact: It is almost imperative for home buyers to peruse a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, comprised of useful and often-revealing information - 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 proximity.
Myth: Appraisals are ordered only to assess home values in house sales involving mortgage-lending transactions.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you get a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal report. The purpose of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the appraisal report. The purpose of a home inspector is to find the condition of the house and its major components, then provide a report on their findings.