Appraisal myths & facts

It is mandated by law that an appraiser is required to be state-licensed to write appraisals for federally-related real estate sales in Washington. You have the ability to demand a copy of the completed appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.

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

Fact: While most states back the idea that assessed value is equal to estimated market value, this usually is not the case. Sometimes when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for years or more, it may vary wildly.

Myth: The value of a home will differ depending upon whether the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no vested interest in the result of the report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value will equate to replacement cost.

Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. The dollar amount demanded to rebuild a home is what forms the replacement cost.

Myth: Specific methods, like the price per square foot of the property, are what appraisers use to ascertain the price of a house.

Fact: There are many numerous calculations that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable homes.

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

Fact: Cost appreciation of a specific property is always concluded on an individualized basis, factoring in information on comparable homes and other relevant specifications within the home itself. It doesn't matter if the economy is doing well or declining.

Myth: The home's outside is determinate of the actual worth of the house; there is no need to do an interior inspection.

Fact: To determine an accurate worth beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no possible way to get all of this information from simply looking at the home from the outside.

Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance real estate, they own their appraisal report.

Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be given it by their lending company.

Myth: It doesn't concern consumers what's in the appraisal so long as it meets the requirements of their lending company.

Fact: It is very important for consumers to read a copy of their report so that they can double-check the accuracy of the document, in case they need to question its accuracy. 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, filled with helpful and often-revealing information - including 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.