Appraisal myths & facts
By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-supported purchases. You also have the right to request a copy of the finished report from your lending agency. Contact Phoenix Valuations, LLC if you have any questions about the appraisal procedure.
Myth: Assessed value should be the same as to market value.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an prolonged time.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the value of the home will vary.
Fact: There is no real interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is ordered.
Myth: The replacement cost of the home should be is on par with the market value.
Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. Replacement cost is the dollar amount needed to reconstruct a property in-kind.
Myth: There are certain methods that appraisers use to show the cost of a property, like the price per square foot.
Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.
Myth: As homes appreciate by a specific percentage - in a strong economic state - the houses in proximity are expected to appreciate by the same amount.
Fact: Cost appreciation of a specific property must be concluded on an individualized basis, factoring in information on comparable houses and other relevant specifications within the property itself. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Maricopa County or Scottsdale, AZ?Contact Phoenix Valuations, LLC
Myth: Just examining what the house looks like on its exterior gives a good idea of its value.
Fact: Home value is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data necessary.
Myth: Since the consumer is the party who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the appraisal. Due the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with one by their lending company.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it meets the requirements of their lending company.
Fact: A consumer should definitely read through their appraisal report; there might be some questions or some worries about the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data stored in an appraisal that could 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 vicinity.
Myth: The only reason someone would order an appraisal is if a home needs its worth estimated in a lender sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a variety of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is no different than a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal report. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. House inspectors will produce a report that will determine the condition of the home and its major components and possible damage.