Appraisal myths & facts
By law, an appraiser is required to be state-licensed to produce appraisals for federally-supported sales. You have the ability to acquire a copy of the completed appraisal report from your lending agency. Contact Northern Arizona Appraisal, Inc. if you have any concerns about the appraisal process.
Myth: Market value will always be the same as the assessed value of the property.
Fact: It is possible that Arizona, like most states, supports the suggestion that the assessed value equals the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are perfect examples of why this occurs.
Myth: The opinion of value of a house will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: Any time market value is found, it should equate to the replacement cost of the property.
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 particular home. Replacement value is the dollar amount required to rebuild a house in-kind.
Myth: There are specific methods that real estate appraisers use to show the value of a home, like the price per square foot.
Fact: There are many different calculations that an appraiser will use to make an in-depth analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the cost of recently sold comparable properties.
Myth: As houses appreciate by a certain percentage - in a strong economic state - the homes nearby are expected to appreciate by the same amount.
Fact: Cost increase of a certain home has to be determined on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. This is true in strong economic times as well as poor.
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Myth: You can generally tell what a home is worth simply by looking at the outside.
Fact: Home value is concluded by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just examining the property from the outside.
Myth: Since the consumer is the person who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, consumers have to be given a copy of the appraisal report upon written request, because of 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 lender.
Fact: A consumer should definitely read through their document; there will probably be some questions or some worries about the accuracy of the appraisal that should be addressed. 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, containing a great deal 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 proximity.
Myth: Appraisers are hired only to assess house values in property 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 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. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. A home inspector determines the condition of the house and its major components and reports their findings.