Appraisal myths debunked

By law, an appraiser is required to be state-licensed to produce appraisals for federally-supported sales. You are also entitled by law to receive a copy of the finished appraisal from your lending agency. Contact Willamette Valley Appraisal Professionals if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser should be equivalent to the market value.

Fact: It is possible that Oregon, like most states, validates the suggestion that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. Generally when interior remodeling has occurred 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 will have impact in the cost of the home depending upon for whom the appraiser is working.

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

Myth: The replacement value of the house should be is on par with the market value.

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a home without being under duress from any external party to purchase or sell. Replacement cost is the dollar amount required to rebuild a house in-kind.

Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the cost of a home.

Fact: Appraisers complete a comprehensive analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent values of comparable properties.

Myth: In a strong economy - when the costs of houses in a given county are reported to be appreciating by a particular percentage - the worth of individual homes in the area can be expected to appreciate by that same percentage.

Fact: Price increase of a specific property has to be determined on a case-by-case basis, factoring in information on comparable homes and other relevant specifications within the home itself. This is true in fair economic times as well as poor.

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

Fact: Home worth is determined by a multitude of variables, including area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found simply by examining the home from the exterior.

Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their home, they legally own their appraisal.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that ordered the appraisal. However, home buyers must be given a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.

Myth: Consumers need not care about what is in their report so long as it meets the necessities of their lending company.

Fact: A home buyer should definitely look through their document; there will probably be some questions or some concerns about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing a great deal of data - 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.