Appraisal myths & facts

Legally, an appraiser is required to be state certified to produce substantiated real estate appraisals for federally-related transactions. Also by law, you are allowed to demand a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser should be equivalent to the market value.

Fact: It is probable that Washington, like most states, supports the suggestion that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Sometimes when interior remodeling has been done and the assessor is not aware of the improvement or properties in the area have not been reassessed for quite a while, it may vary wildly.

Myth: The buyer or the seller will have some pull in the cost of the property depending upon for whom the appraiser is working.

Fact: The price of the home does not affect the payment of the appraiser; as such, the appraiser has no preconceived interest in the opinion of value of the property. What this means is he will conduct business with impartiality and independence regardless for whom the appraisal is created.

Myth: The replacement value of the house is always is on par with the market value.

Fact: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific property. The dollar amount needed to rebuild a property is what shows the replacement cost.

Myth: There are certain methods that appraisers use to determine the cost of a property, such as the price per square foot.

Fact: There are many differing methods that an appraiser will use to make a full analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable homes.

Myth: In a robust economy - when the prices of homes in a given region are found to be appreciating by a particular percentage - the prices of individual properties in the vicinity can be expected to increase by that same percentage.

Fact: All increase of price is on an individual basis, determined by data on relevant considerations and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.

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Myth: Just examining what the house looks like on its exterior gives an idea of its cost.

Fact: To conclude an accurate price beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just examining the property from the outside.

Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance real estate, you own the produced appraisal.

Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. However, consumers must be given a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.

Myth: Consumers need not care about what is in their appraisal so long as it meets the needs of their lending agency.

Fact: Only if consumers examine a copy of their appraisal can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an incredible amount of 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 proximity.

Myth: Appraisers are hired only to estimate home values in property sales involving mortgage-lending deals.

Fact: Appraisers can have many different qualifications and designations which allow them to perform a series of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: Appraisal reports are definitely not the same as a home inspection report. An appraiser forms an opinion of value in the appraisal process and resulting appraisal. The point of a home inspector is to assess the condition of the property and its major components, then compose a report on their inspection.