Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-related sales. Also by law, you are entitled to request a copy of the completed report from your lending agency. Contact Pacific Crest Appraisals LLC if you have any questions about the appraisal process.

Myth: Assessed value should always be the same as to market value.

Fact: It could be that Washington, like most states, validates the suggestion that the assessed value equals the market value; however, this certainly varies based on state-to-state. Sometimes when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the have not been reassessed for quite a while, it may vary wildly.

Myth: The opinion of value of a home will differ depending upon if the appraisal is produced for the buyer or the seller.

Fact: The appraiser has no vested interest in the outcome of the appraisal 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 property will be is on par with the market value.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under duress from any external group to purchase or sell. If the home were reconstructed, the dollar amount required to do so would set the replacement cost.

Myth: There are certain ways that appraisers use to show the opinion of value of a home, like the price per square foot.

Fact: Appraisers make a comprehensive analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: When the economy is strong and the worth of homes are reported to be appreciating by a certain percentage, the other homes in the area can be expected to increase based on that same percentage.

Fact: Any cost at which an appraiser arrives in regards to a certain property is always personalized, based on certain factors found from the data of comparable homes and other specifications within the house itself. It makes no difference whether the economy is powerful or on the decline.

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

Fact: Property value is concluded by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found simply by examining the property from the outside.

Myth: Because the consumer is the one who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.

Fact: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. Home buyers must be provided with a version of the document upon written request because of the Equal Credit Opportunity Act.

Myth: There's no need for consumers to even care about what the appraisal contains so long as their lender is fine with the contents therein.

Fact: Only if home buyers read a copy of their report can they ensure 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 a wealth of information contained in an appraisal that will probably 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 area.