Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to create legitimate real estate appraisals for federally-related transactions. Also by law, you have the ability to demand a copy of the finished report from your lending agency. Contact Northern Arizona Appraisal, Inc. if you have any concerns about the appraisal procedure.

Myth: The value that is ascertained by the appraiser is required to be equivalent to the market value.

Fact: It could be that Arizona, like most states, supports the suggestion that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are excellent examples of why there might be a differential in price.

Myth: The value of a house will differ depending upon whether the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no personal interest in the result of the appraisal and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

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

Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain property, with neither being under duress to buy or sell. The dollar amount needed to rebuild a home is what shows the replacement cost.

Myth: Certain formulae, like the price per square foot of the property, are the methods appraisers use to determine the price of a property.

Fact: Appraisers complete a detailed analysis of all factors pertaining to the cost of a house, including its location, condition, size, proximity to facilities and recent costs of comparable properties.

Myth: When the economy is on the rise and the cost of homes are found to be increasing by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.

Fact: Any price at which an appraiser concludes concerning a particular property is always personalized, based on certain factors pulled from the information of comparable homes and other specifications within the house itself. This is true in good economic times as well as bad.

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Myth: The house's outside is determinate of the actual worth of the house; it is unnecessary to do an interior appraisal.

Fact: To find an accurate price beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these factors can be derived just by inspecting the property from the exterior.

Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their property, they own their appraisal report.

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that ordered the appraisal. Home buyers have to be given a version of the appraisal report through request as per the Equal Credit Opportunity Act.

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

Fact: A consumer should definitely look through their document; there may be some questions or some worries with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect record for future reference, filled with 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 area.

Myth: The only reason someone would order an appraisal is if a house needs its cost assessed in a lender-based sales transaction.

Fact: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: An appraisal is no different than a home inspection.

Fact: Appraisal reports are nothing like a home inspection. An appraiser forms an opinion of value in the appraisal process and resulting appraisal. A home inspector analyzes the condition of the property and its major components and reports their findings.