Common myths about appraising

By law, an appraiser needs to be state-licensed to produce appraisals for federally-supported transactions. You also have the right to receive a copy of the finished report from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Assessed value will always be equal to market value.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby homes are excellent examples of why the price can vary.

Myth: Depending on whether the appraisal is done for the buyer or the seller, the appraised value of the house will vary.

Fact: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is conducted.

Myth: Market value should be the same as replacement cost.

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a house without being under pressure from any external party to buy or sell. If the home were reconstructed, the dollar amount necessary to do so would be the replacement cost.

Myth: Specific methods, like the price per square foot of the property, are what appraisers use to determine the cost of a property.

Fact: There are many numerous ways that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the cost of recently sold comparable houses.

Myth: In a robust economy - when the costs of houses in a given area are found to be increasing by a certain percentage - the prices of individual homes in the area can be expected to appreciate by that same percentage.

Fact: Any worth at which an appraiser arrives in regards to a specific house is always personalized, based on certain factors pulled from the data of comparable houses and other considerations within the house itself. It makes no difference if the economy is powerful or terrible.

Have other questions about appraisers, appraising or real estate in Maricopa County or Phoenix, AZ?

Contact us

Myth: Just examining what the house looks like on its exterior gives an excellent idea of its cost.

Fact: There are a multitude of different variables that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just inspecting the property from the exterior.

Myth: Considering that the consumer is the person who provides 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 report is owned by the lending company unless the lender releases their interest in the document. However, consumers have to be provided with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.

Myth: There's no need for home buyers to even care about what the appraisal report contains so long as their lending agency is fine with the contents therein.

Fact: It is almost imperative for home buyers to go through a copy of their appraisal so that they can verify the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, as it contains 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 proximity.

Myth: Appraisers are hired only to assess real estate property values in property sales involving mortgage-lending transactions.

Fact: Ordering an appraisal can fulfill a variety of needs 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 no different than a home inspection report.

Fact: An appraisal does not serve the same purpose as an inspection report. The job of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. A home inspector assesses the condition of the building and its main components and reports their findings.