Appraisal myths debunked
It is mandated by law that a real estate appraiser needs to be state-licensed to produce appraisals for federally-related real estate sales in Arizona. You have the ability to request a copy of the completed appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is ascertained by the appraiser must be exactly the same as the market value.
Fact: It is probable that Arizona, like most states, validates the idea that the assessed value is the same as the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are prime examples of why this occurs.
Myth: The value of a home will vary depending upon if the appraisal is provided for the buyer or the seller.
Fact: The opinion of value of the house does not affect the salary of the appraiser; due to this, the appraiser has no preconceived interest in the value of the property. Obviously, he will complete his job with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value should equal replacement cost.
Fact: Without any suggestion from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. The dollar amount required to reconstruct a home is what shows the replacement cost.
Myth: There are specific methods that appraisers use to show the opinion of value of a property, like the price per square foot.
Fact: There are many different calculations that an appraiser will use to make a comprehensive analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable properties.
Myth: In a powerful economy - when the worth of properties in a given region are reported to be appreciating by a particular percentage - the costs of individual houses in the proximity can be expected to rise by that same percentage.
Fact: Price appreciation of a specific home is always concluded on an individualized basis, factoring in information on comparable houses and other relevant considerations. It makes no difference if the economy is strong or poor.
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Myth: The home's exterior is determinate of the actual price of the house; it is unnecessary to do an interior inspection.
Fact: To determine an accurate value beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. An external inspection definitely can't provide all of the information necessary.
Myth: Because the consumer is the party 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: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be given it by their lending agency.
Myth: There's no point for home buyers to even concern themselves with what the appraisal contains so long as their lending institution is fine with the contents therein.
Fact: Only if consumers 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. Also, the report makes an invaluable record for future reference, containing helpful and often-revealing 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: The only reason someone would hire an appraiser is if a home needs its cost estimated in a lender sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a lot of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection report.
Fact: Appraisal reports are definitely not the same as a home inspection. The purpose of an appraisal is to form an opinion of fair market value during the appraisal process and the production of the report. The point of a home inspector is to find the condition of the property and its main components, then write a report on their conclusions.