Appraisal myths & facts
It is required by the government that an appraiser is required to be state-licensed to offer appraisals for federally-supported real estate purchases in Arizona. The law entitles you to receive a copy of your finished appraisal from your lender after it has been produced. Contact our professional staff if you have any questions about the appraisal process.
Myth: Market value has to be the same as the assessed value of the property.
Fact: While most states support the concept that assessed value approximates estimated market value, this commonly is not the case. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby homes are prime examples of why this occurs.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the value of the property will vary.
Fact: The price of the home does not affect the payment of the appraiser; as such, the appraiser has no vested interest in the worth of the home. Obviously, he will provide job with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Market value should equate to replacement cost.
Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. If the home were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: Certain formulae, like the price per square foot of the property, are what appraisers use to determine the cost of a home.
Fact: Appraisers make a full analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent worth of comparable houses.
Myth: As properties increase their worth by a certain percentage - in a robust economic state - the homes in proximity are expected to appreciate by the same amount.
Fact: Any price at which an appraiser arrives concerning a particular property is always individualized, based on certain factors pulled from the data of comparable properties and other specifications within the home itself. This is true in good economic times as well as bad.
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Myth: The house's exterior is determinate of the actual price of the property; it is unnecessary to do an interior appraisal.
Fact: Home worth is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information necessary.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to purchase or refinance real estate, you own the provided appraisal report.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. Consumers have to be supplied with a copy of the document through request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal so long as it meets the requirements of their lending institution.
Fact: A home buyer should definitely inspect their report; there will probably be some questions or some worries with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, as it contains an exorbitant 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the worth of a house during a sales transaction involving a lending institution.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a series 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: You don't need to get an appraisal if you order a home inspection.
Fact: Appraisal reports are completely different than a home inspection. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. A home inspector assesses the condition of the home and its major components and reports their findings.