Common myths about appraising
It is mandated by law that an appraiser must be state-licensed to create appraisal reports for federally-related real estate sales in Arizona. Also by law, you have the ability to demand a copy of the finished report from your lender. Contact ASAP Appraisal Services, Inc. if you have any concerns about the appraisal process.
Myth: Market value will be the same as the assessed value of the property.
Fact: While most states back the concept that assessed value approximates estimated market value, this often is not the case. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are prime examples of why the price can vary.
Myth: The appraised value of a home will change depending upon if the appraisal is provided for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is found, it should equate to the replacement cost of the home.
Fact: Market value is based on what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under duress to buy or sell. The dollar amount demanded to rebuild a house is what constitutes the replacement cost.
Myth: There are certain ways that real estate appraisers use to find the cost of a home, such as the price per square foot.
Fact: There are many numerous calculations that an appraiser will use to make a comprehensive investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable homes.
Myth: In a powerful economy - when the costs of homes in a given area are reported to be rising by a particular percentage - the prices of individual homes in the vicinity can be expected to appreciate by that same percentage.
Fact: Any worth at which an appraiser arrives concerning a certain property is always individualized, based on certain factors pulled from the information of comparable properties and other considerations within the property itself. It makes no difference whether the economy is powerful or terrible.
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Myth: Just seeing what the home looks like on the outside gives a good idea of its cost.
Fact: House worth is determined by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just looking at the property from the exterior.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they own their appraisal.
Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Consumers must be provided with a version of the document through request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their report so long as it exceeds the needs of their lending agency.
Fact: It is very important for home buyers to go through a copy of their report so that they can verify the accuracy of the report, in case there is a need to question its accuracy. 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, containing 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: Appraisers are hired only to estimate building values in home sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection report. The job of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. The purpose of a home inspector is to find the condition of the property and its main components, then compose a report on their inspection.