Common myths about appraising

It is enforced by the government that an appraiser needs to be state-licensed to offer appraisal reports for federally-related real estate transactions in Oregon. The law entitles you to acquire a copy of your finished appraisal report from your lending agency after it has been provided. Contact Willamette Valley Appraisal Professionals if you have any concerns about the appraisal procedure.

Myth: Assessed value should always be similar to to market value.

Fact: It might be that Oregon, like most states, supports the idea that the assessed value equals 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 prime examples of why there might be a differential in price.

Myth: Depending on if the appraisal is ordered for the buyer or the seller, the cost of the property will vary.

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

Myth: Market value should equate to replacement cost.

Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under pressure to buy or sell. Replacement value is the dollar amount needed to reconstruct a property in-kind.

Myth: Appraisers use a formula, like a specific price per square foot, to arrive at the value of a property.

Fact: An appraisal report is an amalgamation of information based on the house's size, location, proximity to undesirable facilities, the condition of the property and the cost of recent comparable sales. You can rely on Willamette Valley Appraisal Professionals's appraisers to be honest in assessing this data.

Myth: In a powerful economy - when the sales prices of properties in a given neighborhood are found to be increasing by a particular percentage - the costs of individual properties in the proximity can be expected to rise by that same percentage.

Fact: Worth appreciation of a specific home is always determined on a case-by-case basis, factoring in data on comparable properties and other relevant elements. It makes no difference if the economy is excellent or poor.

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Myth: You can commonly tell what a property is worth simply by looking at the outside.

Fact: To determine an accurate value beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data required.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their property, they own their appraisal report.

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

Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the needs of their lending agency.

Fact: It is a very good idea for consumers to look at a copy of their appraisal so that they can verify the accuracy of the report, in case there is a need to question its accuracy. 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 useful and often-revealing data - 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: Appraisers are hired only to assess house values in home sales involving mortgage-lending transactions.

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

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

Fact: A home inspection report has a completely different purpose than an appraisal report. An appraiser finds an opinion of value in the appraisal process and resulting appraisal report. House inspectors will write a report that will express the condition of the house and its major components and possible damage.