Common myths about appraising

It is mandated by legal agencies that a real estate appraiser needs to be state-licensed to write appraisals for federally-supported property purchases in Oregon. The law allows you to acquire a copy of your completed appraisal from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value should always be the same as to market value.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. 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 value of a property will change depending upon whether the appraisal is ordered for the buyer or the seller.

Fact: The appraiser has no personal interest in the outcome of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Market value should equal replacement cost.

Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property. The replacement cost is the dollar amount required to reconstruct a property in-kind.

Myth: Certain formulae, like the price per square foot, are the methods appraisers use to ascertain the value of a house.

Fact: There are many different processes that an appraiser will use to make an in-depth investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable properties.

Myth: When the economy is robust and the sales prices of properties are reported to be rising by a certain percentage, the other houses in the neighborhood can be expected to rise based on that same percentage.

Fact: Price increase of a specific property has to be determined on an individualized basis, factoring in information on comparable properties and other relevant elements. It makes no difference if the economy is excellent or terrible.

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

Fact: Home worth is determined by a number of factors, including area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply inspecting the property from the exterior.

Myth: Since you're the one providing the money for the appraisal report when applying for the loan to buy or refinance your home, you own the produced appraisal report.

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be given one by their lending company.

Myth: Home buyers need not be concerned with what is in their appraisal so long as it meets the needs of their lending company.

Fact: Only if home buyers look at a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, comprised of helpful and often-revealing 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 area.