Appraisal myths & facts

Legally, an appraiser has to be state certified to produce substantiated real estate appraisals for federally-backed transactions. You are also entitled by law to demand a copy of the completed appraisal report from your lender. Contact Sound Appraisal Group, Inc if you have any questions about the appraisal procedure.

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

Fact: While most states back the suggestion that assessed value is the same as estimated market value, this generally is not the case. At times when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the Silverdale have not been reassessed for quite a while, it may vary wildly.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the opinion of value of the house will vary.

Fact: The opinion of value of the property does not affect the payment of the appraiser; due to this, the appraiser has no vested interest in the value of the home. What this means is he will render services with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Market value should be the same as replacement cost.

Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. The dollar amount demanded to rebuild a property is what constitutes the replacement cost.

Myth: Certain methods, such as the price per square foot of the property, are the ways appraisers use to come to the cost of a property.

Fact: There are many different methods that an appraiser will use to make a full investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the opinion of value of recently sold comparable properties.

Myth: As homes increase their worth by a certain percentage - in a strong economic state - the homes within the same neighborhood are figured to increase by the same amount.

Fact: All appreciation of value is on a case-by-case basis, found by data on relevant considerations and the data of comparable houses. This is true in excellent economic times as well as poor.

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Myth: Just seeing what the house looks like on the outside gives a good idea of its cost.

Fact: Property worth is determined by a number of factors, including location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data needed.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance your house, you own the produced appraisal report.

Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. Home buyers must be given a copy of the appraisal report upon written request due to the Equal Credit Opportunity Act.

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

Fact: Only if consumers read a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an report that could be useful to the home buyer 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 vicinity.

Myth: The only reason someone would hire an appraiser is if a house needs its price assessed in a lender-based sales transaction.

Fact: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

Myth: There's no reason to get an appraisal if you get a home inspection.

Fact: An appraisal does not fulfill the same purpose as an inspection report. The appraiser concludes on an opinion of value in the appraisal process and resulting document. House inspectors will create a report that will determine the condition of the property and its major components and possible damage.