Common myths about appraising
By law, an appraiser must be state-licensed to produce appraisals for federally-backed sales. Also by law, you are allowed to receive a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser should be the same as the market value.
Fact: While most states back the concept that assessed value equates estimated market value, this usually is not the case. At times when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the Silverdale have not been reassessed for quite some time, it may vary wildly.
Myth: The buyer or the seller may have leverage in the value of the property depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is created.
Myth: Market value should equal replacement cost.
Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a property without being under pressure from any external group to buy or sell. The replacement cost is the dollar amount required to rebuild a property in-kind.
Myth: Specific methods, like the price per square foot of the property, are the methods appraisers use to determine the cost of a home.
Fact: There are many differing formulae that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable properties.
Myth: In a powerful economy - when the values of houses in a given neighborhood are found to be increasing by a particular percentage - the values of individual properties in the area can be expected to appreciate by that same percentage.
Fact: Price appreciation of a certain home has to be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant specifications within the house itself. This is true in excellent economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Kitsap County or Silverdale, WA?Contact us
Myth: You can often find what a house is worth simply by looking at the outside.
Fact: There are a number of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by viewing the property from the outside.
Myth: Since you're the one funding for the appraisal report when applying for your loan to buy or refinance your house, you own the ordered appraisal report.
Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the appraisal. However, consumers have to be supplied with a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even care about what the appraisal report contains so long as their lending agency is fine with the contents therein.
Fact: It is almost imperative for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an appraisal that should be useful to the consumer 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 proximity.
Myth: The only reason someone would hire an appraiser is if a home needs its price estimated in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and will perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Fact: Appraisal reports are completely different than a home inspection. The job of the appraiser is to form an opinion of value in the appraisal process and through writing the report. House inspectors will create a report that will show the condition of the house and its major components and possible damage.