Legally, an appraiser must be state certified to produce substantiated real estate appraisals for federally-related transactions. Also by law, you are entitled to request a copy of the finished report from your lender. Contact us if you have any concerns about the appraisal procedure.

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

Myth: Market value will always be the same as the assessed value of the property.
Reality: While most states support the idea that assessed value approximates estimated market value, this usually is not the case. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an prolonged period.

Myth: The buyer or the seller sometimes may have impact in the value of the house depending upon for whom the appraiser is working.
Reality: The appraiser has no personal interest in the result of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is determined, it should equal the replacement cost of the home.
Reality: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. Replacement cost is the dollar amount required to rebuild a home in-kind.

Myth: There are specific methods that real estate appraisers use to show the opinion of value of a property, like the price per square foot.
Reality: Appraisers make a comprehensive analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.

Myth: In a powerful economy - when the values of houses in a given neighborhood are found to be increasing by a certain percentage - the prices of individual homes in the area can be expected to appreciate by that same percentage.
Reality: All appreciation of value is on a case-by-case basis, concluded by information on relevant elements and the data of comparable properties. It makes no difference whether the economy is good or on the decline.

Myth: Just examining what the property looks like on the outside gives a good idea of its value.
Reality: There are a multitude of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be found just by viewing the house from the outside.

Myth: Since the consumer is the one who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Reality: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the appraisal. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be given one by their lender.

Myth: There's no reason for consumers to even care about what the report contains so long as their lending company is fine with the contents therein.
Reality: Only when consumers read a copy of their report can they double-check its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, filled with useful 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 area.

Myth: Appraisers are hired only to assess building values in property sales involving mortgage-lending deals.
Reality: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: A house inspection serves the same purpose as an appraisal.
Reality: Appraisal reports have almost nothing in common with a home inspection report. The purpose of the appraiser is to find an opinion of value in the appraisal process and through creating the report. The task of a home inspector is to approximate the condition of the home and its main components, then write a report on their findings.

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