By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related transactions. Also by law, you have the ability to receive a copy of the completed appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.

WalshStreet Appraisals discusses myths and realities about real estate appraisals and appraisers

Myth: Assessed value will always be similar to market value.
Reality: It is possible that California, like most states, supports the idea that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an extended period.

Myth: Depending on whether the appraisal is provided for the buyer or the seller, the appraised value of the home will vary.
Reality: There is no vested interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless of for whom the appraisal is conducted.

Myth: The replacement value of the property will be on par with the market value.
Reality: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home. The dollar amount needed to rebuild a property is what shows the replacement cost.

Myth: Appraisers use a formula, such as a certain price per square foot, to conclude the value of a property.
Reality: There are many numerous processes that an appraiser will use to make a comprehensive investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable properties.

Myth: When the economy is doing well and the sales prices of houses are found to be rising by a certain percentage, the other properties in the proximity can be expected to rise based on that same percentage.
Reality: The appreciation of a specific house is always determined on a case-by-case basis, factoring in data on comparable homes and other relevant elements. This is true in good economic times as well as bad.

Myth: The house's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.
Reality: To conclude a definite value beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. As you can see, none of these variables can be found simply by looking at the house from the exterior.

Myth: Since the consumer is the person who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Reality: Legally, the document is owned by the lender unless the lender releases their interest in the report. However, consumers must be given a copy of the report upon written request, under the Equal Credit Opportunity Act.

Myth: Home buyers need not care about what is in their report so long as it satisfies the needs of their lending agency.
Reality: Only when consumers read a copy of their appraisal report can they verify its accuracy and know if they should ask questions. 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 an incredible amount 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 area.

Myth: Appraisers are hired only to assess building values in house sales involving mortgage-lending deals.
Reality: Based upon their qualifications and designations, appraisers can and often do provide a multitude of 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.
Reality: An appraisal does not fulfill the same purpose as an inspection. The point of an appraisal report is to conclude upon an opinion of market value during the appraisal process and the completion of the report. House inspectors will produce a report that will explain the condition of the property and its major components and possible damage.

Contact WalshStreet Appraisals if you have any other questions about appraisers, appraising or real estate in Los Angeles or Los Angeles, California.