Appraisal myths & facts
Legally, an appraiser is required to be state certified to perform legitimate real estate appraisals for federally-related purchase. Also by law, you have the ability to demand a copy of the completed appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Assessed value should always be the same as to market value.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are prime examples of why the price can vary.
Myth: The appraised value of a house will change depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The opinion of value of the home does not affect the pay of the appraiser; as such, the appraiser has no personal interest in the value of the house. Obviously, he will render services with impartiality and independence regardless for whom the appraisal is produced.
Myth: Market value should equal replacement cost.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell. If the home were reconstructed, the dollar amount necessary to do so would be the replacement cost.
Myth: There are certain ways that real estate appraisers use to determine the cost of a property, like the price per square foot.
Fact: Appraisers make a full analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: In a strong economy - when the prices of properties in a given neighborhood are found to be increasing by a certain percentage - the prices of individual houses in the vicinity can be expected to increase by that same percentage.
Fact: Any worth at which an appraiser concludes concerning a certain property is always individualized, based on certain factors derived from the data of comparable properties and other specifications within the house itself. It makes no difference if the economy is strong or poor.
Have other questions about appraisers, appraising or real estate in Maricopa County or Chandler, AZ?Contact our professional staff
Myth: You can usually tell what a home is worth simply by looking at the exterior.
Fact: House value is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply inspecting the home from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to purchase or refinance your home, you own the provided appraisal report.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending company that purchased the appraisal. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be provided with it by their lender.
Myth: Consumers need not be concerned with what is in their appraisal report so long as it satisfies the necessities of their lending agency.
Fact: A consumer should definitely look through their appraisal; there may be some questions or some concerns with the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, comprised of useful 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 value estimated in a lender-based sales transaction.
Fact: Based upon their qualifications and designations, appraisers can and do provide a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the completion of the report. The task of a home inspector is to determine the condition of the property and its major components, then produce a report on these inspection.