Appraisal myths debunked

It is required by the government that an appraiser must be state-licensed to perform appraisals for federally-related property purchases in Washington. The law gives you the right to receive a copy of your completed appraisal report from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Market value should be equivocal to the assessed value of the property.

Fact: While most states back the suggestion that assessed value is the same as estimated market value, this usually is not the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an extended period of time.

Myth: The buyer or the seller can have leverage in the cost of the home depending upon for whom the appraiser is working.

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

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

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain property, with neither being under duress to buy or sell. Replacement cost is the dollar amount necessary to reconstruct a property in-kind.

Myth: There are specific methods that appraisers use to find the opinion of value of a house, such as the price per square foot.

Fact: There are many numerous formulae that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable homes.

Myth: In a powerful economy - when the worth of houses in a given region are found to be increasing by a certain percentage - the prices of individual properties in the vicinity can be expected to appreciate by that same percentage.

Fact: All appreciation of value is on an individual basis, determined by information on relevant considerations and the data of comparable homes. It makes no difference whether the economy is excellent or on the decline.

Myth: The home's outside is determinate of the actual value of the property; it is unnecessary to do an interior appraisal.

Fact: Home worth is determined by a number of variables, including location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the information needed.

Myth: Since the consumer is the person 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: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. However, consumers have to be given a copy of the report upon written request, through the Equal Credit Opportunity Act.

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

Fact: Only if home buyers read a copy of their appraisal report can they ensure 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 serve as a record for the future, containing a great deal of data - including, but certainly 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.