Common myths about appraising
Legally, a real estate appraiser has to be state certified to perform substantiated appraisal reports for federally-backed transactions. The law allows you to get a copy of your finished report from your lending agency after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value needs to be similar to the assessed value of the property.
Fact: While most states back the concept that assessed value equates estimated market value, this commonly is not the case. Sometimes when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.
Myth: The appraised value of a property will vary depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value of the property is always is on par with the market value.
Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any outside group to buy or sell. The replacement cost is the dollar amount required to rebuild a house in-kind.
Myth: There are specific methods that real estate appraisers use to find the cost of a property, such as the price per square foot.
Fact: There are many varied methods that an appraiser will use to make a detailed analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable houses.
Myth: When the economy is on the rise and the sales prices of houses are reported to be increasing by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.
Fact: All increase of price is on a case-by-case basis, concluded by information on relevant considerations and the data of comparable houses. It makes no difference whether the economy is robust or on the decline.
Have other questions about appraisers, appraising or real estate in Clackamas County or Milwaukie, OR?Contact Willamette Valley Appraisal Professionals
Myth: The house's exterior is determinate of the actual worth of the house; it is unnecessary to do an interior inspection.
Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from simply looking at the house from the outside.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, they own their appraisal.
Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. Due the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be given it by their lending company.
Myth: Consumers need not worry about what is in their appraisal so long as it satisfies the necessities of their lending institution.
Fact: A consumer should definitely inspect their document; there will probably be some questions or some worries with the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, as it contains an exorbitant amount of information - 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its price estimated in a lender sales transaction.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide 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: A home inspection report serves a completely different purpose than an appraisal. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. The job of a home inspector is to assess the condition of the home and its main components, then compose a report on these conclusions.