Appraisal myths & facts

It is required by legal agencies that an appraiser needs to be state-licensed to create appraisals for federally-related home transactions in Wisconsin. You are also entitled by law to acquire a copy of the completed appraisal report from your lending agency. Contact Walz Appraisal if you have any concerns about the appraisal procedure.

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

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the area have not been reassessed for quite a while, it may vary wildly.

Myth: Depending on if the appraisal is done for the buyer or the seller, the appraised value of the property will vary.

Fact: There is no personal interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is ordered.

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

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell. The dollar amount demanded to reconstruct a property is what forms the replacement cost.

Myth: Certain methods, such as the price per square foot of the property, are what appraisers use to determine the cost of a home.

Fact: An appraisal report is a collection of information concluded from the property's size, location, proximity to certain facilities, the condition of the home and the value of recent comparable sales. You can count on Walz Appraisal's appraisers to be forthright in assessing this information.

Myth: In a strong economy - when the costs of properties in a given region are reported to be appreciating by a certain percentage - the prices of individual houses in the vicinity can be expected to rise by that same percentage.

Fact: Worth appreciation of a certain home has to be determined on a case-by-case basis, factoring in information on comparable properties and other relevant elements. It makes no difference if the economy is good or poor.

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Myth: Just looking at what the property looks like on the outside gives an idea of its cost.

Fact: Home worth is concluded by a number of factors, including area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information required.

Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance your house, you own the provided appraisal report.

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. Consumers have to be given a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their appraisal document so long as it exceeds the requirements of their lending company.

Fact: Only if consumers look over a copy of their report can they ensure 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, containing helpful and often-revealing data - 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 proximity.

Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender-based sales transaction.

Fact: Depending upon their qualifications and designations, appraisers can and will perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: An appraisal report does not fulfill the same purpose as an inspection report. The purpose of the appraiser is to find an opinion of value in the appraisal process and through producing the report. House inspectors will write a report that will determine the condition of the property and its major components and possible damage.