Appraisal myths debunked

By law, an appraiser needs to be state-licensed to produce appraisals for federally-related transactions. The law gives you the right to acquire a copy of your completed appraisal from your lender after it has been produced. Contact our professional staff if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser should be exactly the same as the 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. At times when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: The appraised value of a house will change depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The appraiser has no personal interest in the result of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: The replacement cost of the home is always is on par with the market value.

Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any external group to purchase or sell. The replacement cost is the dollar amount required to rebuild a house in-kind.

Myth: Appraisers use a calculation, like a specific price per square foot, to come to the value of a home.

Fact: An appraisal report is an amalgamation of information concluded from the house's size, location, proximity to undesirable facilities, the condition of the home and the worth of recent comparable sales. You can depend on Northern Arizona Appraisal, Inc.'s staff to be forthright in assessing this data.

Myth: In a robust economy - when the values of houses in a given region are reported to be rising by a particular 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 an individual basis, found by information on relevant considerations and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.

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

Contact Northern Arizona Appraisal, Inc.

Myth: The home's outside is determinate of the actual price of the property; there is no need to do an interior inspection.

Fact: House worth is determined by a number of factors, including area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by viewing the property from the exterior.

Myth: Because the consumer is the person who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Consumers have to be given a version of the appraisal report upon written request as per the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lender.

Fact: A home buyer should definitely look through their appraisal report; there may be some questions or some worries with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, filled with useful and often-revealing data - including 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: Appraisers are hired only to assess building values in home sales involving mortgage-lending deals.

Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: A property inspection serves the same purpose as an appraisal.

Fact: A home inspection has a completely different purpose than an appraisal report. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. House inspectors will create a report that will determine the condition of the home and its major components and possible damage.