Common myths about appraising

By law, an appraiser must be state-licensed to offer appraisals for federally-backed transactions. You are also entitled by law to request a copy of the completed report from your lending agency. Contact Northern Arizona Appraisal, Inc. if you have any questions about the appraisal process.

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

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are excellent examples of why the price can vary.

Myth: The value of a home will be different depending upon whether the appraisal is ordered for the buyer or the seller.

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

Myth: The replacement value of the property should be is on par with the market value.

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house. Replacement value is the dollar amount required to reconstruct a home in-kind.

Myth: Certain formulae, like the price per square foot of the property, are the methods appraisers use to arrive at the value of a property.

Fact: There are many differing ways that an appraiser will use to make a full investigation 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: As houses increase their worth by a certain percentage - in a strong economic state - the properties around the appreciating properties are expected to increase by the same amount.

Fact: All increase of worth is on an individual basis, determined by information on relevant conditions and the data of comparable properties. It makes no difference whether the economy is excellent or on the decline.

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

Fact: To determine an accurate worth beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply viewing the property from the exterior.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance your house, you own the provided appraisal.

Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the report. However, home buyers must be supplied with a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the report so long as it meets the requirements of their lending agency.

Fact: Only if home buyers look over a copy of their appraisal 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 appraisal report can serve as a record for the future, containing a great deal of data - 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 vicinity.