Appraisal myths & facts
Legally, an appraiser is required to be state certified to write substantiated appraisal reports for federally-related sales. You are also entitled by law to demand a copy of the completed appraisal report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value will always be the same as to market value.
Fact: While most states back the idea that assessed value equates 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 houses in the area have not been reassessed for an prolonged period of time.
Myth: The value of a house will be different depending upon if the appraisal is provided for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is established, it should be similar to the replacement cost of the house.
Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a house without being under duress from any external party to purchase or sell. If the property were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: Specific methods, like the price per square foot of the property, are what appraisers use to come to the worth of a property.
Fact: Appraisers complete a full analysis of all factors in consideration to the price of a house, including its location, condition, size, proximity to facilities and recent costs of comparable properties.
Myth: In a robust economy - when the worth of homes in a given region are reported to be rising by a certain percentage - the worth of individual houses in the vicinity can be expected to rise by that same percentage.
Fact: Any price at which an appraiser concludes concerning a specific home is always personalized, based on certain factors concluded from the information of comparable properties and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Maricopa County or Scottsdale, AZ?Contact our professional staff
Myth: You can usually tell what a house is worth simply by looking at the outside.
Fact: To find an accurate value beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply viewing the house from the outside.
Myth: Since you're the one paying for the appraisal report when applying for the loan to purchase or refinance your house, you own the produced appraisal.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be provided with one by their lender.
Myth: Consumers need not care about what is in their appraisal document so long as it exceeds the needs of their lending institution.
Fact: It is a very good idea for consumers to go through a copy of their appraisal report so that they can verify the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, comprised of 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a home needs its price assessed in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and may provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you have had a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection report. The task of the appraiser is to find an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the home and its main components and reports these findings.