Common myths about appraising
Legally, an appraiser has to be state certified to produce substantiated appraisal reports for federally-backed transactions. Also by law, you have the ability to request a copy of the completed appraisal from your lending agency. Contact us if you have any concerns about the appraisal procedure.
Myth: Assessed value will always equate 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. Often when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the area have not been reassessed for years or more, it may vary wildly.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the value of the home will vary.
Fact: The appraiser has no vested interest in the outcome of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will equate to replacement cost.
Fact: Market value is found by what a willing buyer would likely pay a willing seller for a particular property, with neither being under undue influence to buy or sell. The dollar amount required to reconstruct a property is what forms the replacement cost.
Myth: Certain formulae, such as the price per square foot, are the methods appraisers use to ascertain the worth of a home.
Fact: There are many varied processes that an appraiser will use to make a comprehensive investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable properties.
Myth: In a powerful economy - when the worth of properties in a given region are reported to be appreciating by a certain percentage - the prices of individual houses in the proximity can be expected to increase by that same percentage.
Fact: All increase of value is on a one-on-one basis, determined by information on relevant elements and the data of comparable homes. 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: You can often see what a home is worth simply by looking at the exterior.
Fact: Property value is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found simply by looking at the property from the outside.
Myth: Because the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Legally, the document is owned by the lending company unless the lender releases their interest in the document. Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be given one by their lending agency.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the necessities of their lending agency.
Fact: Only if consumers examine a copy of their report 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 incredible amount of information - 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 area.
Myth: Appraisals are ordered only to assess building values in home sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and will perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: A home inspection serves a completely different purpose than an appraisal. The job of the appraiser is to form an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the property and its major components and reports these findings.