Appraisal myths & facts
It is mandated by legal agencies that an appraiser needs to be state-licensed to create appraisal reports for federally-related property transactions in Arizona. Also by law, you are allowed to receive a copy of the completed appraisal from your lending agency. Contact Northern Arizona Appraisal, Inc. if you have any questions about the appraisal process.
Myth: Assessed value generally will be equal to market value.
Fact: While most states uphold the idea that assessed value is the same as estimated market value, this often is not the case. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby properties are prime examples of why this occurs.
Myth: The buyer or the seller will have leverage in the cost of the home depending upon for whom the appraiser is working.
Fact: The value of the property does not affect the salary of the appraiser; as a result, the appraiser has no personal interest in the worth of the house. What this means is he will render task with impartiality and independence regardless for whom the appraisal is produced.
Myth: The replacement cost of the home is always is on par with the market value.
Fact: The way market value is found is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside group to buy or sell. The dollar amount necessary to rebuild a home is what constitutes the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to come to the cost of a property.
Fact: An appraisal report is a collection of information based on the house's size, location, proximity to undesirable facilities, the condition of the home and the cost of recent comparable sales. You can rely on Northern Arizona Appraisal, Inc.'s appraisers to be forthright in assessing this information.
Myth: In a strong economy - when the sales prices of houses in a given county are reported to be rising by a particular percentage - the prices of individual properties in the vicinity can be expected to appreciate by that same percentage.
Fact: All increase of price is on an individual basis, determined by information on relevant elements and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Maricopa County or Phoenix, AZ?Contact Northern Arizona Appraisal, Inc.
Myth: Just examining what the property looks like on the outside gives a good idea of its worth.
Fact: To determine an accurate value beyond all doubt, an appraiser must assess the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this data from just looking at the house from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance real estate, you own the ordered appraisal report.
Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. Home buyers have to be given a copy of the appraisal report through request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their report so long as it satisfies the needs of their lending institution.
Fact: It is a very good idea for home buyers to go through a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its accuracy. 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 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: Appraisers are hired only to assess home values in house sales involving mortgage-lending deals.
Fact: Depending upon their qualifications and designations, appraisers can and will perform a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you order a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection report. An appraiser concludes on an opinion of value in the appraisal process and resulting report. The task of a home inspector is to determine the condition of the property and its main components, then create a report on their inspection.