Common myths about appraising

By law, an appraiser needs to be state-licensed to offer appraisals for federally-related sales. You have the ability to demand a copy of the completed report from your lending agency. Contact us if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser is required to be the same as the market value.

Fact: It is possible that Washington, like most states, supports the idea that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby houses are prime examples of why there might be a differential in price.

Myth: The appraised value of a home will differ depending upon whether the appraisal is produced for the buyer or the seller.

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

Myth: Any time market value is found, it should be the same as the replacement cost of the property.

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house. The dollar amount necessary to reconstruct a house is what shows the replacement cost.

Myth: There are certain ways that appraisers use to show the cost of a property, like the price per square foot.

Fact: There are many differing formulae 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 specific facilities and the opinion of value of recently sold comparable houses.

Myth: As houses appreciate by a certain percentage - in a robust economic state - the homes around the appreciating properties are figured to increase by the same amount.

Fact: Any value at which an appraiser arrives in regards to a particular property is always personalized, based on certain factors concluded from the data of comparable houses and other specifications within the house itself. It doesn't matter if the economy is doing well or declining.

Myth: Just seeing what the property looks like on its exterior gives a good idea of its value.

Fact: To determine an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information needed.

Myth: Since you're the one funding for the appraisal report when applying for the loan to purchase or refinance real estate, you own the produced appraisal report.

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

Myth: There's no need for consumers to even care about what the appraisal report contains so long as their lending institution is fine with the contents therein.

Fact: A home buyer should definitely look through their document; there will probably be some questions or some worries about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an appraisal that could be useful to the home buyer 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 vicinity.