Common myths about appraising

It is mandated by legal agencies that an appraiser is required to be state-licensed to produce appraisals for federally-related home purchases in Arizona. The law allows you to receive a copy of your completed appraisal report from your lender after it has been produced. Contact Northern Arizona Appraisal, Inc. if you have any questions about the appraisal procedure.

Myth: The value that is ascertained by the appraiser should be exactly the same as the market value.

Fact: While most states support the concept that assessed value equates estimated market value, this often is not the case. There are times when interior remodeling has been done and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller will have an influence in the value of the house depending upon for whom the appraiser is working.

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

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

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular house, with neither being under undue influence to buy or sell. The dollar amount demanded to reconstruct a house is what shows the replacement cost.

Myth: There are certain ways that real estate appraisers use to determine the value of a property, like the price per square foot.

Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the worth of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.

Myth: As properties appreciate by a certain percentage - in a strong economic state - the properties in proximity are figured to appreciate by the same amount.

Fact: All increase of price is on an individual basis, determined by data on relevant considerations and the data of comparable properties. This is true in fair economic times as well as poor.

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Myth: The property's outside is determinate of the actual value of the home; it is unnecessary to do an interior inspection.

Fact: There are a multitude of different variables that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply viewing the home from the exterior.

Myth: Since you're the one paying for the appraisal report when applying for your loan to purchase or refinance your home, you own the produced appraisal.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report. Home buyers have to be provided with a copy of the report through request as per the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even care about what the appraisal contains so long as their lender is satisfied.

Fact: It is very important for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, comprised of useful and often-revealing data - 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 vicinity.

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 lender.

Fact: Based upon their qualifications and designations, appraisers can and often do provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

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

Fact: An appraisal report does not serve the same purpose as an inspection. The appraiser forms an opinion of value in the appraisal process and resulting appraisal report. A home inspector analyzes the condition of the home and its main components and reports these findings.