Common myths about appraising
By law, an appraiser must be state-licensed to perform appraisals for federally-supported transactions. The law entitles you to acquire a copy of your completed appraisal report from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: The value that is assessed by the appraiser must be equivalent to the market value.
Fact: It could be that Washington, like most states, supports the suggestion that the assessed value is the same as the market value; however, this is not often the case. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby houses are prime examples of why this occurs.
Myth: The buyer or the seller often will have leverage in the value of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a property without being under duress from any outside party to buy or sell. The dollar amount demanded to rebuild a home is what constitutes the replacement cost.
Myth: Specific formulae, such as the price per square foot of the property, are what appraisers use to arrive at the worth of a home.
Fact: There are many varied methods that an appraiser will use to make a comprehensive investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the opinion of value of recently sold comparable homes.
Myth: In a powerful economy - when the costs of properties in a given region are found to be appreciating by a particular percentage - the worth of individual homes in the vicinity can be expected to increase by that same percentage.
Fact: All appreciation of value is on an individual 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 Clark County or Vancouver, WA?Contact our professional staff
Myth: The property's exterior is determinate of the actual worth of the home; it is unnecessary to do an interior appraisal.
Fact: There are a multitude of different factors that show the value of a house; these factors include location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the data necessary.
Myth: Considering that the consumer is the one who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers have to be given a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the requirements of their lending agency.
Fact: It is very important for consumers to read a copy of their appraisal report so that they can verify the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing a great deal 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: There is no reason to order an appraisal unless you are trying to get an assessment of the worth of a house during a sales transaction involving a lending institution.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: A home inspection report serves a completely different purpose than an appraisal report. An appraiser finds an opinion of value in the appraisal process and resulting report. House inspectors will produce a report that will express the condition of the house and its major components and possible damage.