Appraisal myths debunked
Legally, a real estate appraiser has to be state certified to perform legitimate appraisal reports for federally-backed transactions. You have the ability to request a copy of the completed appraisal report from your lending agency. Contact Phoenix Valuations, LLC if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Fact: While most states support the suggestion that assessed value equates estimated market value, this usually is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended time.
Myth: The buyer or the seller can have impact in the cost of the property depending upon for whom the appraiser is working.
Fact: The price of the house does not affect the pay of the appraiser; because of this, the appraiser has no vested interest in the worth of the home. Obviously, he will complete his business with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Any time market value is found, it should equate to the replacement cost of the home.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under pressure to buy or sell. Replacement value is the dollar amount necessary to rebuild a home in-kind.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the value of a property.
Fact: An appraisal is an assertion of information concluded from the home's size, location, proximity to undesirable facilities, the condition of the house and the price of recent comparable sales. You can depend on Phoenix Valuations, LLC's appraisers to be professional in assessing this information.
Myth: In a powerful economy - when the prices of homes in a given county are found to be rising by a certain percentage - the worth of individual houses in the area can be expected to appreciate by that same percentage.
Fact: All appreciation of price is on a case-by-case basis, determined by information on relevant conditions and the data of comparable properties. It makes no difference if the economy is strong or poor.
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Myth: Just looking at what the home looks like on its exterior gives a good idea of its cost.
Fact: To determine an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from just inspecting the house from the outside.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance your house, you own the produced appraisal report.
Fact: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. However, consumers have to be supplied with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even concern themselves with what the appraisal contains so long as their lending agency is fine with the contents therein.
Fact: Only if consumers look over a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing an exorbitant amount of information - including, but certainly 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a house needs its price estimated in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Fact: Appraisal reports are nothing like a home inspection report. The function of an appraisal is to find an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector analyzes the condition of the building and its main components and reports these findings.