Common myths about appraising
Legally, a real estate appraiser must be state certified to perform legitimate appraisal reports for federally-backed transactions. Also by law, you have the ability to demand a copy of the completed report from your lending agency. Contact ASAP Appraisal Services, Inc. if you have any concerns about the appraisal process.
Myth: Market value should be similar to the assessed value of the property.
Fact: It could be that Arizona, like most states, supports the common myth that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. There are times when interior remodeling has been done and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: The appraised value of a house will change depending upon if the appraisal is conducted for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. The dollar amount required to reconstruct a property is what shows the replacement cost.
Myth: There are certain methods that real estate appraisers use to show the opinion of value of a property, such as the price per square foot.
Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: In a powerful economy - when the costs of homes in a given county are reported to be appreciating by a certain percentage - the worth of individual properties in the vicinity can be expected to appreciate by that same percentage.
Fact: Any value at which an appraiser concludes in regards to a specific property is always personalized, based on certain factors concluded from the information of comparable houses and other specifications within the house itself. 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 price of the property; there is no need to do an interior inspection.
Fact: To find an accurate worth beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived simply by viewing the home from the exterior.
Myth: Since you're the one funding for the appraisal when applying for the loan to purchase or refinance real estate, you own the produced appraisal report.
Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. Home buyers must be provided with a version of the report through request due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the needs of their lending agency.
Fact: Only if home buyers read a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, containing useful and often-revealing information - including 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: The only reason someone would hire an appraiser is if a home needs its cost estimated in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection report. An appraiser forms an opinion of value in the appraisal process and resulting document. A home inspector assesses the condition of the building and its major components and reports these findings.