Appraisal myths & facts
Legally, a real estate appraiser has to be state certified to produce substantiated real estate appraisals for federally-related sales. You also have the right to demand a copy of the completed report from your lending agency. Contact us if you have any concerns about the appraisal process.
Myth: Market value should be similar to the assessed value of the property.
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. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an prolonged time.
Myth: The buyer or the seller sometimes may have impact in the value of the home depending upon for whom the appraiser is working.
Fact: The price of the property does not affect the salary of the appraiser; as a result, the appraiser has no pressured interest in the worth of the property. Obviously, he will render business with impartiality and objectivity regardless for whom the appraisal is created.
Myth: Any time market value is found, it should equal the replacement cost of the home.
Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a property without being under influence from any outside party to buy or sell. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.
Myth: Specific methods, such as the price per square foot of the property, are the methods appraisers use to determine the price of a property.
Fact: Appraisers make a full analysis of all factors pertaining to the cost of a home, including its location, condition, size, proximity to facilities and recent costs of comparable properties.
Myth: As properties appreciate by a specific percentage - in a strong economic state - the properties in proximity are figured to appreciate by the same amount.
Fact: Price increase of a specific property has to be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. This is true in strong economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Maricopa County or Scottsdale, AZ?Contact Phoenix Valuations, LLC
Myth: Just seeing what the house looks like on its exterior gives an idea of its value.
Fact: Home worth is determined by a number of variables, including area, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived simply by viewing the house from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to buy or refinance your house, you own the produced appraisal report.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, home buyers must be given a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it meets the needs of their lending agency.
Fact: It is almost imperative for consumers to read a copy of their appraisal report so that they can verify the accuracy of the document, 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. There is an incredible amount of data stored in an appraisal that should be useful to the home buyer 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 region.
Myth: Appraisers are hired only to assess home values in property sales involving mortgage-lending transactions.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection. An appraiser decides upon an opinion of value in the appraisal process and resulting report. House inspectors will produce a report that will show the condition of the property and its major components and possible damage.