Appraisal myths & facts

By law, an appraiser must be state-licensed to produce appraisals for federally-related purchases. Also by law, you have the right to demand a copy of the finished appraisal from your lending agency. Contact Willamette Valley Appraisal Professionals if you have any concerns about the appraisal procedure.

Myth: The value that is ascertained by the appraiser is required to be the same as the market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby homes are perfect examples of why there might be a differential in price.

Myth: The buyer or the seller can have leverage in the value of the property depending upon for whom the appraiser is working.

Fact: The cost of the property does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the worth of the house. What this means is he will conduct business with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: Any time market value is established, it should equal the replacement cost of the home.

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a property without being under pressure from any outside party to buy or sell. The replacement cost is the dollar amount needed to reconstruct a home in-kind.

Myth: Appraisers use a formula, like a certain price per square foot, to figure out the value of a house.

Fact: An appraisal report is an amalgamation of information based on the home's size, location, proximity to certain facilities, the condition of the property and the price of recent comparable sales. You can depend on Willamette Valley Appraisal Professionals's staff to be honest in assessing this information.

Myth: In a strong economy - when the worth of homes in a given neighborhood are found to be increasing by a particular percentage - the values of individual houses in the vicinity can be expected to appreciate by that same percentage.

Fact: All increase of value is on a one-on-one basis, determined by information on relevant elements and the data of comparable homes. It makes no difference whether the economy is excellent or terrible.

Myth: The property's exterior is determinate of the actual worth of the home; it is unnecessary to do an interior inspection.

Fact: Home worth is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply looking at the home from the outside.

Myth: Since the consumer is the one who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. However, consumers must be given a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the needs of their lending company.

Fact: It is a very good idea for consumers to go through a copy of their report so that they can verify the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, comprised of helpful and often-revealing 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.