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Common myths about appraising

It is mandated by legal agencies that a real estate appraiser is required to be state-licensed to write appraisals for federally-related real estate transactions in Washington. Also by law, you have the ability to receive a copy of the finished report from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value will always be equal to market value.

Fact: It is possible that Washington, like most states, validates the idea that the assessed value equates to the market value; however, this is not often the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are prime examples of why this occurs.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the value of the property will vary.

Fact: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is conducted.

Myth: Market value should be the same as replacement cost.

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a home without being under influence from any outside group to buy or sell. The dollar amount necessary to reconstruct a home is what forms the replacement cost.

Myth: There are certain methods that appraisers use to find the cost of a home, like the price per square foot.

Fact: Appraisers make a full analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: As properties appreciate by a certain percentage - in a strong economic state - the homes within the same neighborhood are figured to appreciate by the same amount.

Fact: Worth increase of a certain home must be determined on a case-by-case basis, factoring in information on comparable houses and other relevant elements. It makes no difference whether the economy is good or bad.

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

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

Fact: Property value is determined by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by viewing the property from the exterior.

Myth: Because the consumer is the party who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the appraisal. By the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be given it by their lending agency.

Myth: Home buyers need not be concerned with what is in their appraisal so long as it exceeds the requirements of their lending agency.

Fact: A consumer should definitely look through their document; there could be some questions or some worries about the accuracy of the inspection that need to be addressed. 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 exorbitant 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 vicinity.

Myth: Appraisals are ordered only to estimate real estate property values in house sales involving mortgage-lending deals.

Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

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

Fact: An appraisal does not fulfill the same purpose as an inspection. The appraiser forms an opinion of value in the appraisal process and resulting appraisal report. The job of a home inspector is to determine the condition of the property and its main components, then write a report on their inspection.