Appraisal myths & facts
By law, an appraiser needs to be state-licensed to produce appraisals for federally-supported purchases. Also by law, you are allowed to request a copy of the finished appraisal report from your lending agency. Contact Northern Arizona Appraisal, Inc. if you have any concerns about the appraisal process.
Myth: The value that is ascertained by the appraiser is required to be exactly the same as the market value.
Fact: While most states support the suggestion that assessed value is equal to estimated market value, this commonly is not the case. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are excellent examples of why this occurs.
Myth: The value of a property will change depending upon whether the appraisal is provided for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is conducted.
Myth: The replacement cost of the home will be is on par with the market value.
Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house. If the home were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the cost of a house.
Fact: An appraisal report is a collection of data based on the house's size, location, proximity to certain facilities, the condition of the property and the price of recent comparable sales. You can rely on Northern Arizona Appraisal, Inc.'s staff to be forthright in assessing this data.
Myth: As properties increase their worth by a specific percentage - in a robust economy - the homes within the same neighborhood are figured to appreciate by the same amount.
Fact: All appreciation of price is on an individual basis, found by data on relevant conditions and the data of comparable houses. This is true in good economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Maricopa County or Phoenix, AZ?Contact Northern Arizona Appraisal, Inc.
Myth: You can often tell what a home is worth simply by looking at the exterior.
Fact: To find an accurate worth beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the data needed.
Myth: Considering that the consumer is the one who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Unless a lender releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal. Home buyers must be provided with a version of the document through request as per the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it meets the necessities of their lending company.
Fact: A consumer should definitely read through their appraisal report; there might be some questions or some concerns with the accuracy of the inspection that need to 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, containing helpful 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its value estimated in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Fact: Appraisal reports are nothing like a home inspection. The purpose of the appraiser is to form an opinion of value in the appraisal process and through producing the report. The purpose of a home inspector is to find the condition of the house and its major components, then create a report on their findings.