Appraisal myths debunked
Legally, an appraiser must be state certified to produce substantiated real estate appraisals for federally-backed transactions. Also by law, you are entitled to request a copy of the finished appraisal report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value must be equivocal to the assessed value of the property.
Fact: While most states back the suggestion that assessed value is equal to 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 homes in the vicinity have not been reassessed for an extended time.
Myth: The appraised value of a house will differ depending upon whether the appraisal is provided for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is found, it should be similar to the replacement cost of the home.
Fact: The way market value is found 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 group to buy or sell. Replacement value is the dollar amount required to rebuild a house in-kind.
Myth: Appraisers use a calculation, such as a specific price per square foot, to figure out the cost of a house.
Fact: There are many differing formulae that an appraiser will use to make a detailed investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable homes.
Myth: As homes appreciate by a specific percentage - in a robust economy - the homes within the same neighborhood are expected to appreciate by the same amount.
Fact: Any value at which an appraiser concludes in regards to a certain home is always personalized, based on certain factors derived from the data of comparable houses and other specifications within the property itself. It makes no difference whether the economy is strong or terrible.
Have other questions about appraisers, appraising or real estate in Maricopa County or Scottsdale, AZ?Contact our professional staff
Myth: Just seeing what the property looks like on its exterior gives a good idea of its worth.
Fact: To conclude 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 found simply by viewing the property from the exterior.
Myth: Considering that the consumer is the party who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. Home buyers must be provided with a copy of the document upon written request due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it meets the necessities of their lending agency.
Fact: Only if home buyers read a copy of their appraisal can they double-check 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 appraisal report can double as a record for the future, since it contains an exorbitant amount of data - including, but 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 order an appraisal is if a home needs its cost assessed in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is the same as a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. An appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report. The point of a home inspector is to find the condition of the home and its major components, then write a report on their conclusions.