Common myths about appraising

It is required by law that an appraiser must be state-licensed to write appraisal reports for federally-supported home purchases in Arizona. Also by law, you have the ability to request a copy of the completed report from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.

Myth: The value that is assessed by the appraiser will be the same as the market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an prolonged period.

Myth: The buyer or the seller may have impact in the value of the property depending upon for whom the appraiser is working.

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

Myth: Any time market value is found, it should equal the replacement cost of the house.

Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a property without being under influence from any external party to purchase or sell. Replacement value is the dollar amount necessary to rebuild a house in-kind.

Myth: Appraisers use a formula, like a certain price per square foot, to figure out the value of a home.

Fact: An appraisal report is a collection of data based on the home's size, location, proximity to certain facilities, the condition of the house and the price of recent comparable sales. You can count on Northern Arizona Appraisal, Inc.'s staff to be ethical in assessing this information.

Myth: When the economy is doing well and the sales prices of properties are reported to be rising by a certain percentage, the other houses in the proximity can be expected to appreciate based on that same percentage.

Fact: Any worth at which an appraiser arrives in regards to a specific home is always individualized, based on certain factors concluded from the data of comparable homes and other considerations within the property itself. This is true in good economic times as well as poor.

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

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

Myth: Because consumers fund appraisals when applying for loans to buy or refinance real estate, they legally own their appraisal.

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

Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the needs of their lender.

Fact: It is almost imperative for consumers to read a copy of their report so that they can double-check the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, containing a great deal of information - 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.