Common myths about appraising
It is mandated by legal agencies that an appraiser needs to be state-licensed to write appraisal reports for federally-related home transactions in Arizona. The law entitles you to acquire a copy of your finished report from your lender after it has been provided. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser must be exactly the same as the market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on if the appraisal is done for the buyer or the seller, the appraised value of the home will vary.
Fact: The appraiser has no personal interest in the result of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a home without being under duress from any outside group to purchase or sell. If the home were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: Specific formulae, like the price per square foot, are the methods appraisers use to determine the cost of a home.
Fact: An appraisal report is an amalgamation of information based on the property's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can rely on Phoenix Valuations, LLC's staff to be professional in assessing this data.
Myth: When the economy is strong and the worth of houses are found to be appreciating by a certain percentage, the other properties in the area can be expected to increase based on that same percentage.
Fact: Worth increase of a certain property is always determined on an individualized basis, factoring in information on comparable homes and other relevant considerations. It makes no difference whether the economy is robust or on the decline.
Have other questions about appraisers, appraising or real estate in Maricopa County or Scottsdale, AZ?Contact our professional staff
Myth: Just looking at what the home looks like on the outside gives an excellent idea of its value.
Fact: There are a multitude of different factors that determine property value; these factors include area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the information needed.
Myth: Considering that the consumer is the party who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Legally, the report is owned by the lending company unless the lender releases their interest in the appraisal. Consumers have to be provided with a version of the report through request as per the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their document so long as it exceeds the requirements of their lending group.
Fact: It is a very good idea for home buyers to peruse a copy of their report so that they can verify the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, since it contains a great deal of information - 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: Appraisers are hired only to estimate real estate property values in house sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and may perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: A home inspection has a completely different purpose than an appraisal report. The function of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. The job of a home inspector is to assess the condition of the house and its main components, then provide a report on their findings.