Appraisal myths debunked

By law, an appraiser is required to be state-licensed to produce appraisals for federally-supported purchases. Also by law, you are allowed to demand a copy of the finished report from your lender. Contact us if you have any questions about the appraisal process.

Myth: Market value must be the same as the assessed value of the property.

Fact: It is possible that Washington, like most states, validates the idea that the assessed value equals the market value; however, this is not often the case. At times when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller sometimes may have impact in the cost of the property depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the outcome of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value should approximate replacement cost.

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a specific house, with neither being under duress to buy or sell. The dollar amount required to rebuild a property is what constitutes the replacement cost.

Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the worth of a house.

Fact: An appraisal is an amalgamation of data based on the house's size, location, proximity to specific facilities, the condition of the house and the worth of recent comparable sales. You can rely on AAAnderson Associates Inc.'s staff to be professional in assessing this data.

Myth: As properties increase their worth by a certain percentage - in a robust economy - the homes nearby are figured to appreciate by the same amount.

Fact: Any worth at which an appraiser concludes in regards to a specific property is always personalized, based on certain factors derived from the information of comparable homes and other considerations within the home itself. This is true in strong economic times as well as bad.

Myth: Just seeing what the property looks like on its exterior gives a good idea of its worth.

Fact: Home worth is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information needed.

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

Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be given it by their lender.

Myth: Consumers need not care about what is in their document so long as it exceeds the needs of their lending agency.

Fact: Only if consumers look at a copy of their appraisal 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. Also, the appraisal makes an excellent record for future reference, comprised of useful 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.