Appraisal myths & facts

Legally, a real estate appraiser is required to be state certified to write legitimate real estate appraisals for federally-related purchase. The law allows you to receive a copy of your finished appraisal from your lender after it has been provided. Contact ASAP Appraisal Services, Inc. if you have any questions about the appraisal process.

Myth: Assessed value will always equate to market value.

Fact: It could be that Arizona, like most states, supports the common myth that the assessed value equals the market value; however, this is not always true. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an extended period of time.

Myth: The buyer or the seller sometimes may have leverage in the cost of the property depending upon for whom the appraiser is working.

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

Myth: Market value should be the same as replacement cost.

Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any external group to buy or sell. If the house were reconstructed, the dollar amount needed to do so would form the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to figure out the worth of a house.

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

Myth: When the economy is robust and the worth of properties are found to be appreciating by a certain percentage, the other homes in the neighborhood can be expected to increase based on that same percentage.

Fact: Price increase of a specific home must be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant elements. This is true in fair economic times as well as bad.

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Myth: The property's outside is determinate of the actual price of the house; there is no need to do an interior appraisal.

Fact: There are a multitude of different factors that show 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 needed.

Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your house, you own the ordered appraisal report.

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report. Home buyers have to be given a copy of the document upon written request because of the Equal Credit Opportunity Act.

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

Fact: Only if home buyers look through a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing an incredible amount of data - including, but certainly 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 vicinity.

Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a home during a sales transaction involving a lending agency.

Fact: Appraisers can have many different qualifications and designations which allow them to perform a series 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: An appraisal is no different than a home inspection.

Fact: Appraisal reports are definitely not the same as a home inspection. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the report. House inspectors will write a report that will show the condition of the house and its major components and possible damage.