Common myths about appraising
It is required by legal agencies that a real estate appraiser must be state-licensed to write appraisals for federally-related home sales in Arizona. The law allows you to receive a copy of your finished report from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser will be the same as the market value.
Fact: While most states support the concept that assessed value is equal to estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an extended period of time.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the cost of the home will vary.
Fact: The price of the house does not affect the pay of the appraiser; because of this, the appraiser has no vested interest in the cost of the property. What this means is he will provide services with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Market value should approximate replacement cost.
Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. Replacement cost is the dollar amount required to rebuild a home in-kind.
Myth: Appraisers use a formula, such as a certain price per square foot, to arrive at the value of a property.
Fact: An appraisal report is a collection of data based on the home's size, location, proximity to undesirable facilities, the condition of the property and the cost of recent comparable sales. You can count on ASAP Appraisal Services, Inc.'s appraisers to be honest in assessing this information.
Myth: When the economy is strong and the cost of homes are reported to be appreciating by a certain percentage, the other properties in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Price appreciation of a certain property is always concluded on an individualized basis, factoring in information on comparable homes and other relevant considerations. It makes no difference if the economy is good or bad.
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Myth: The house's outside is determinate of the actual worth of the property; it is unnecessary to do an interior inspection.
Fact: There are a number of different factors that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data necessary.
Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your house, you own the ordered appraisal report.
Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. Under the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with one by their lending agency.
Myth: There's no reason for home buyers to even care about what the appraisal report contains so long as their lending institution is satisfied.
Fact: It is very important for consumers to check over a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a valuable record for future reference, containing helpful 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 proximity.
Myth: Appraisals are ordered only to estimate house values in property sales involving mortgage-lending transactions.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are completely different than a home inspection. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report. The point of a home inspector is to assess the condition of the house and its major components, then compose a report on their inspection.