Appraisal myths & facts

Legally, an appraiser must be state certified to perform substantiated appraisal reports for federally-related purchase. The law allows you to get a copy of your finished appraisal from your lending agency after it has been produced. Contact Willamette Valley Appraisal Professionals if you have any concerns about the appraisal process.

Myth: Assessed value generally will be equal to market value.

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an prolonged period of time.

Myth: The buyer or the seller often will have an influence in the value of the property depending upon for whom the appraiser is working.

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

Myth: Any time market value is established, it should equate to the replacement cost of the home.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under undue influence to buy or sell. The dollar amount needed to rebuild a house is what constitutes the replacement cost.

Myth: There are specific ways that real estate appraisers use to determine the value of a house, such as the price per square foot.

Fact: An appraisal is a collection of information based on the house's size, location, proximity to specific facilities, the condition of the property and the worth of recent comparable sales. You can count on Willamette Valley Appraisal Professionals's staff to be forthright in assessing this data.

Myth: When the economy is on the rise and the worth of houses are reported to be appreciating by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.

Fact: All increase of worth is on a case-by-case basis, found by information on relevant conditions and the data of comparable houses. This is true in good economic times as well as poor.

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Myth: Just looking at what the home looks like on the outside gives an excellent idea of its cost.

Fact: Home value is concluded by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by looking at the house from the outside.

Myth: Because the consumer is the one who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the report. Consumers have to be supplied with a version of the report through request due to the Equal Credit Opportunity Act.

Myth: Consumers need not care about what is in their appraisal report so long as it meets the needs of their lending group.

Fact: Only if home buyers read a copy of their appraisal 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. There is a great deal of data stored in an appraisal 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: The only reason someone would hire an appraiser is if a house needs its worth estimated in a lender sales transaction.

Fact: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: An appraisal does not fulfill the same purpose as an inspection report. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. House inspectors will produce a report that will determine the condition of the property and its major components and possible damage.