Appraisal myths & facts
It is required by law that a real estate appraiser needs to be state-licensed to offer appraisal reports for federally-related property purchases in Oregon. The law allows you to get a copy of your finished appraisal from your lender after it has been produced. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value will always be equal to market value.
Fact: It might be that Oregon, like most states, validates the idea that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby houses are perfect examples of why this occurs.
Myth: The opinion of value of a property will be different depending upon whether the appraisal is produced for the buyer or the seller.
Fact: The opinion of value of the property does not affect the salary of the appraiser; due to this, the appraiser has no vested interest in the worth of the home. This means that he will complete his business with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value should be the same as replacement cost.
Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific property. The dollar amount necessary to reconstruct a property is what constitutes the replacement cost.
Myth: Specific methods, such as the price per square foot, are what appraisers use to come to the value of a house.
Fact: Appraisers make an exhaustive analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.
Myth: In a robust economy - when the sales prices of houses in a given region are found to be rising by a certain percentage - the costs of individual homes in the area can be expected to appreciate by that same percentage.
Fact: All increase of price is on a case-by-case basis, found by information on relevant elements and the data of comparable houses. This is true in fair economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Clackamas County or Milwaukie, OR?Contact us
Myth: The house's exterior is determinate of the actual value of the home; it is unnecessary to do an interior inspection.
Fact: House value is determined by a multitude of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by looking at the property from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their property, they own their appraisal report.
Fact: Legally, the appraisal is owned by the lending company unless the lender relinquishes their interest in the appraisal. Consumers have to be provided with a copy of the report upon written request as per the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the necessities of their lender.
Fact: It is almost imperative for consumers to look at a copy of their appraisal report so that they can verify the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, filled with helpful and often-revealing information - 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 area.
Myth: Appraisers are hired only to assess home values in home sales involving mortgage-lending transactions.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a series 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: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal report does not fulfill the same purpose as an inspection report. The appraiser decides upon an opinion of value in the appraisal process and resulting document. House inspectors will produce a report that will express the condition of the property and its major components and possible damage.