Common myths about appraising

It is enforced by legal agencies that a real estate appraiser must be state-licensed to offer appraisal reports for federally-related real estate sales in Oregon. You also have the right to receive a copy of the completed report from your lending agency. Contact Willamette Valley Appraisal Professionals if you have any questions about the appraisal procedure.

Myth: Assessed value generally will be the same as to market value.

Fact: It is probable that Oregon, like most states, supports the common myth that the assessed value equals the market value; however, this is not often the case. Generally when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary wildly.

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

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

Myth: Market value should equate to replacement cost.

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a property without being under influence from any outside group to buy or sell. The dollar amount needed to rebuild a home is what shows the replacement cost.

Myth: Specific formulae, such as the price per square foot, are the ways appraisers use to come to the worth of a house.

Fact: Appraisers complete a full analysis of all factors pertaining to the worth of a property, including its location, condition, size, proximity to facilities and recent worth of comparable properties.

Myth: In a robust economy - when the sales prices of properties in a given county are found to be appreciating by a certain percentage - the worth of individual properties in the vicinity can be expected to appreciate by that same percentage.

Fact: All increase of value is on a one-on-one basis, determined by data on relevant elements and the data of comparable houses. It makes no difference if the economy is strong or terrible.

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Myth: Just looking at what the home looks like on its exterior gives a good idea of its cost.

Fact: Home worth is concluded by a number of factors, including location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by looking at the property from the outside.

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

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Consumers must be given a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even concern themselves with what the appraisal report contains so long as their lending agency is fine with the contents therein.

Fact: Only if consumers examine 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. Also, the appraisal report makes an excellent record for future reference, comprised of helpful and often-revealing information - including 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: Appraisals are ordered only to estimate building values in property sales involving mortgage-lending transactions.

Fact: Depending upon their qualifications and designations, appraisers can and may provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: You shouldn't need to get an appraisal if you order a home inspection.

Fact: A home inspection report serves a completely different purpose than an appraisal. The point of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the production of the appraisal. House inspectors will write a report that will explain the condition of the property and its major components and possible damage.