Appraisal myths & facts
By law, an appraiser needs to be state-licensed to offer appraisals for federally-supported transactions. You have the ability to request a copy of the finished appraisal from your lending agency. Contact us if you have any questions about the appraisal procedure.
Myth: Assessed value generally will be the same as to market value.
Fact: While most states back the concept that assessed value is the same as estimated market value, this generally is not the case. Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are prime examples of why the price can vary.
Myth: The buyer or the seller sometimes may have an influence in the value of the house depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is written.
Myth: Any time market value is found, it should be the same as the replacement cost of the property.
Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under undue influence to buy or sell. Replacement cost is the dollar amount necessary to reconstruct a property in-kind.
Myth: Appraisers use a formula, such as a certain price per square foot, to come to the worth of a property.
Fact: There are many different calculations that an appraiser will use to make an in-depth investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable homes.
Myth: In a strong economy - when the prices of homes in a given area are found to be increasing by a particular percentage - the prices of individual properties in the proximity can be expected to rise by that same percentage.
Fact: All increase of value is on an individual basis, determined by data on relevant considerations and the data of comparable homes. It makes no difference whether the economy is good or terrible.
Have other questions about appraisers, appraising or real estate in Maricopa County or Scottsdale, AZ?Contact Phoenix Valuations, LLC
Myth: You can often find what a home is worth simply by looking at the outside.
Fact: To find an accurate price beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and current market trends. As you can see, none of these factors can be found just by inspecting the house from the outside.
Myth: Considering that the consumer is the one who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. Home buyers have to be supplied with a copy of the document through request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal report so long as it satisfies the needs of their lending agency.
Fact: It is almost imperative for home buyers to peruse a copy of their appraisal report so that they can double-check the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an report that could be useful to the consumer in the future, such as 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 assess real estate property values in house sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and often do perform a variety 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.
Fact: A home inspection report has a completely different purpose than an appraisal. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. The purpose of a home inspector is to determine the condition of the house and its major components, then provide a report on their conclusions.