Common myths about appraising
By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-backed purchases. Also by law, you have the right to demand a copy of the completed report from your lending agency. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value must be similar to the assessed value of the property.
Fact: It is probable that Arizona, like most states, supports the suggestion that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an prolonged period.
Myth: The value of a home will differ depending upon if the appraisal is conducted for the buyer or the seller.
Fact: The value of the house does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the cost of the home. What this means is he will complete his task with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: Any time market value is established, it should be the same as the replacement cost of the house.
Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home. If the house were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to conclude the value of a house.
Fact: Appraisers make a comprehensive analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.
Myth: In a robust economy - when the sales prices of houses in a given region are found to be rising by a particular percentage - the costs of individual homes in the vicinity can be expected to appreciate by that same percentage.
Fact: Value appreciation of a specific property must be concluded on an individualized basis, factoring in data on comparable properties and other relevant specifications within the home itself. It doesn't matter if the economy is on the rise or declining.
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Myth: You can often tell what a home is worth simply by looking at the exterior.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by examining the property from the outside.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance real estate, you own the produced appraisal.
Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that ordered the appraisal. Home buyers must be provided with a version of the document upon written request as per the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the requirements of their lender.
Fact: Only if home buyers check out a copy of their appraisal can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an appraisal report that should 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 transactions.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no need to get an appraisal if you have had a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal report. An appraiser decides upon an opinion of value in the appraisal process and resulting document. A home inspector assesses the condition of the home and its main components and reports these findings.