Appraisal myths & facts
Legally, an appraiser is required to be state certified to produce substantiated appraisal reports for federally-backed sales. Also by law, 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 process.
Myth: Assessed value should always equate to market value.
Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this usually is not the case. Often when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: The buyer or the seller will have some pull in the cost of the property depending upon for whom the appraiser is working.
Fact: There is no vested interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is conducted.
Myth: Any time market value is established, it should be similar to the replacement cost of the home.
Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside party to buy or sell. Replacement value is the dollar amount necessary to reconstruct a property in-kind.
Myth: Appraisers use a calculation, like a certain price per square foot, to arrive at the cost of a home.
Fact: Appraisers make a comprehensive analysis of all factors pertaining to the price of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: As properties increase their worth by a certain percentage - in a strong economic state - the homes in proximity are figured to appreciate by the same amount.
Fact: Any price at which an appraiser arrives in regards to a specific property is always individualized, based on certain factors concluded from the data of comparable homes and other considerations within the home itself. 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 our professional staff
Myth: The house's exterior is determinate of the actual price of the house; there is no need to do an interior appraisal.
Fact: There are a number of different variables that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these things can be found just by looking at the property from the outside.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance real estate, you own the ordered appraisal.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, home buyers must be provided with a copy of the report upon written request, due to the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their report so long as it meets the requirements of their lending agency.
Fact: Only if consumers read a copy of their appraisal 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. There is a great deal of data stored in an report that should 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 region.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the worth of a house during a sales transaction involving a lending agency.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You shouldn't need to get an appraisal if you order a home inspection.
Fact: Appraisal reports are nothing like a home inspection report. The reason behind an appraisal report is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. The point of a home inspector is to determine the condition of the home and its major components, then produce a report on their conclusions.