profile picture
Legally, an appraiser needs to be state certified to produce substantiated appraisal reports for federally-related transactions. Also by law, you are allowed to demand a copy of the finished appraisal report from your lender. Contact WalshStreet Appraisals if you have any questions about the appraisal procedure.

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

Myth: Market value should be similar to the assessed value of the property.
Reality: It is possible that California, like most states, supports the suggestion that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged time.

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

Myth: The replacement value of the property should be on par with the market value.
Reality: Market value is found by what a willing buyer would likely pay a willing seller for a specific property, with neither being under pressure to buy or sell. The dollar amount necessary to reconstruct a home is what forms the replacement cost.

Myth: There are specific ways that real estate appraisers use to show the value of a home, such as the price per square foot.
Reality: An appraisal report is a collection of data concluded from the house's size, location, proximity to certain facilities, the condition of the house and the values of recent comparable sales. You can rely on WalshStreet Appraisals's staff to be forthright in assessing this data.

Myth: When the economy is robust and the sales prices of houses are reported to be appreciating by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.
Reality: An increase in value of a specific home has to be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant elements. It makes no difference whether the economy is excellent or terrible.

Myth: Just examining what the property looks like on the outside gives an idea of its value.
Reality: House value is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data needed.

Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance your home, you own the produced appraisal.
Reality: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given it by their lending agency.

Myth: It doesn't matter to consumers what's in the report so long as it meets the necessities of their lending agency.
Reality: Only when consumers read a copy of their report can they ensure 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 an excellent record for future reference, containing useful 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.

Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending institution.
Reality: Based upon their qualifications and designations, appraisers can and do provide a series 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 report. The appraiser decides upon an opinion of value in the appraisal process and resulting document. The point of a home inspector is to approximate the condition of the property and its main components, then provide a report on these findings.

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