Appraisal myths & facts
Legally, an appraiser needs to be state certified to write legitimate appraisal reports for federally-supported sales. Also by law, you are entitled to demand a copy of the completed report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be the same as the market value.
Fact: While most states uphold the concept that assessed value is the same as estimated market value, this generally is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.
Myth: The buyer or the seller often will have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will approximate replacement cost.
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 home. The dollar amount demanded to rebuild a property is what constitutes the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to figure out the value of a home.
Fact: There are many differing calculations that an appraiser will use to make a full investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable properties.
Myth: In a strong economy - when the sales prices of homes in a given region are reported to be appreciating by a certain percentage - the worth of individual properties in the vicinity can be expected to increase by that same percentage.
Fact: All appreciation of price is on a case-by-case basis, found by information on relevant elements and the data of comparable properties. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Snohomish County or Mill Creek, WA?Contact Kent & Associates Appraisal
Myth: You can often tell what a house is worth simply by looking at the outside.
Fact: To conclude an accurate worth beyond all doubt, an appraiser must examine the home 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 viewing the home from the outside.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance real estate, you own the provided appraisal report.
Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Home buyers must be given a copy of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their report so long as it satisfies the requirements of their lending group.
Fact: A home buyer should definitely read through their appraisal 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. An appraisal report can double as a record for the future, since it contains 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the price of a property during a sales transaction involving a lending agency.
Fact: Based upon their qualifications and designations, appraisers can and often do provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are completely different than a home inspection. The task of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. A home inspector analyzes the condition of the property and its major components and reports these findings.