Appraisal myths debunked
Legally, an appraiser has to be state certified to perform substantiated appraisal reports for federally-related transactions. Also by law, you are entitled to demand a copy of the finished appraisal report from your lender. Contact ASAP Appraisal Services, Inc. if you have any concerns about the appraisal process.
Myth: Assessed value should equate to market value.
Fact: It is possible that Arizona, like most states, supports the suggestion that the assessed value is the same as the market value; however, this certainly varies based on state-to-state. There are times when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the value of the property will vary.
Fact: There is no vested interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: The replacement cost of the house will be is on par with the market value.
Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a property without being under influence from any outside party to purchase or sell. The dollar amount necessary to reconstruct a home is what shows the replacement cost.
Myth: There are specific methods that appraisers use to determine the opinion of value of a property, such as the price per square foot.
Fact: There are many differing methods that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable homes.
Myth: In a strong economy - when the prices of properties in a given county are reported to be increasing by a particular percentage - the values of individual properties in the vicinity can be expected to increase by that same percentage.
Fact: Any cost at which an appraiser arrives in regards to a certain home is always personalized, based on certain factors pulled from the information of comparable homes and other considerations within the property itself. This is true in fair economic times as well as poor.
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Myth: The property's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior appraisal.
Fact: Home value is determined by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the information required.
Myth: Because the consumer is the person who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Legally, the document is owned by the lender unless the lender releases their interest in the report. Home buyers have to be provided with a copy of the report through request because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the requirements of their lending agency.
Fact: A consumer should definitely inspect their document; there might be some questions or some worries with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an appraisal that could be useful to the consumer in the future, such as 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 region.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the cost of a house during a sales transaction involving a lending company.
Fact: Depending upon their qualifications and designations, appraisers can and may provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is the same as a home inspection report.
Fact: An appraisal does not fulfill the same purpose as an inspection report. The point of an appraisal is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. The purpose of a home inspector is to determine the condition of the home and its major components, then produce a report on their conclusions.