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Appraisal myths debunked

It is required by legal agencies that an appraiser needs to be state-licensed to produce appraisals for federally-supported real estate sales in Washington. The law allows you to receive a copy of your finished appraisal report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value should be similar to to market value.

Fact: While most states support the suggestion that assessed value equates estimated market value, this usually is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged period of time.

Myth: The value of a property will change depending upon if the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no vested interest in the outcome of the appraisal and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value will equal replacement cost.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under pressure to buy or sell. The dollar amount demanded to rebuild a home is what shows the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to conclude the worth of a property.

Fact: Appraisers make an exhaustive analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent values of comparable properties.

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: All appreciation of value is on a case-by-case basis, determined by information on relevant considerations and the data of comparable homes. It makes no difference if the economy is excellent or terrible.

Have other questions about appraisers, appraising or real estate in Clark County or Vancouver, WA?

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Myth: You can often tell what a home is worth simply by looking at the exterior.

Fact: To determine an accurate price beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by looking at the house from the outside.

Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their property, they own their appraisal report.

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, consumers must be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the requirements of their lender.

Fact: It is a very good idea for home buyers to check over a copy of their appraisal report so that they can double-check the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an report that could be useful to the consumer 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 hire an appraiser unless you are trying to get an estimate of the cost of a house during a sales transaction involving a lending agency.

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

Myth: You don't need to get an appraisal if you order a home inspection.

Fact: Appraisal reports have almost nothing in common with a home inspection. The function of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. The job of a home inspector is to approximate the condition of the house and its major components, then compose a report on these conclusions.