Appraisal myths debunked
Legally, a real estate appraiser is required to be state certified to produce substantiated real estate appraisals for federally-related transactions. The law entitles you to get a copy of your completed report from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value will always equate to market value.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are prime examples of why this occurs.
Myth: The buyer or the seller can have some pull in the cost of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no vested interest in the outcome of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement value of the house is always is on par with the market value.
Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home. The dollar amount demanded to reconstruct a property is what forms the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the worth of a home.
Fact: An appraisal is a collection of data based on the home's size, location, proximity to specific facilities, the condition of the home and the cost of recent comparable sales. You can rely on Sound Appraisal Group, Inc's appraisers to be forthright in assessing this information.
Myth: When the economy is on the rise and the worth of properties are found to be increasing by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.
Fact: Cost appreciation of a specific home must be concluded on an individualized basis, factoring in data on comparable houses and other relevant specifications within the house itself. It makes no difference if the economy is strong or on the decline.
Have other questions about appraisers, appraising or real estate in Kitsap County or Silverdale, WA?Contact us
Myth: Just seeing what the house looks like on the outside gives an excellent idea of its worth.
Fact: To determine an accurate price beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. An external inspection obviously can't provide all of the information required.
Myth: Since the consumer is the party who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that ordered the appraisal. However, consumers have to be given a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the requirements of their lending agency.
Fact: Only if consumers read a copy of their 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 makes a near perfect record for future reference, containing helpful and often-revealing 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 property needs its price assessed in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and may provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you get a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection report. The reason behind an appraisal is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. House inspectors will produce a report that will express the condition of the property and its major components and possible damage.