Appraisal myths & facts

It is mandated by legal agencies that an appraiser needs to be state-licensed to offer appraisals for federally-related property sales in Oregon. Also by law, you are entitled to receive a copy of the completed report from your lender. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Market value will always be similar to the assessed value of the property.

Fact: It might be that Oregon, like most states, validates the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged time.

Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the opinion of value of the property will vary.

Fact: The price of the property does not affect the salary of the appraiser; due to this, the appraiser has no pressured interest in the value of the home. What this means is he will complete his task with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: The replacement value of the home is always is on par with the market value.

Fact: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. If the house were reconstructed, the dollar amount needed to do so would make up the replacement cost.

Myth: Specific formulae, like the price per square foot of the property, are the ways appraisers use to determine the value of a property.

Fact: There are many differing methods that an appraiser will use to make a detailed analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable properties.

Myth: In a robust economy - when the values of properties in a given region are found to be increasing by a particular percentage - the worth of individual properties in the proximity can be expected to rise by that same percentage.

Fact: All increase of worth is on a one-on-one basis, determined by data on relevant elements and the data of comparable houses. It makes no difference whether the economy is powerful or poor.

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

Fact: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the information required.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their home, they legally own their appraisal.

Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. However, home buyers must be provided with a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.

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

Fact: It is very important for home buyers to look at a copy of their report so that they can double-check the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an report that should 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 proximity.