Appraisal myths debunked
Legally, a real estate appraiser is required to be state certified to perform substantiated appraisal reports for federally-related sales. You are also entitled by law to demand a copy of the finished report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is ascertained by the appraiser must be equivalent to the market value.
Fact: While most states uphold the suggestion that assessed value equates estimated market value, this commonly is not the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an prolonged period of time.
Myth: The opinion of value of a house will differ depending upon if the appraisal is produced for the buyer or the seller.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is found, it should be the same as the replacement cost of the property.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a particular house, with neither being under undue influence to buy or sell. Replacement cost is the dollar amount necessary to reconstruct a home in-kind.
Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the value of a home.
Fact: Appraisers complete a detailed analysis of all factors pertaining to the cost of a property, including its location, condition, size, proximity to facilities and recent worth of comparable properties.
Myth: When the economy is strong and the value of properties are reported to be increasing by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.
Fact: All appreciation of price is on a one-on-one basis, concluded by information on relevant considerations and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Maricopa County or Mesa, Az?Contact us
Myth: You can commonly find what a home is worth simply by looking at the outside.
Fact: To find an accurate worth beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just viewing the home from the outside.
Myth: Since you're the one paying for the appraisal report when applying for your loan to purchase or refinance real estate, you own the produced appraisal report.
Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. However, home buyers have to be supplied with a copy of the report upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even care about what the appraisal report contains so long as their lender is fine with the contents therein.
Fact: A consumer should definitely inspect their appraisal; there might be some questions or some concerns about the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, filled with useful and often-revealing data - 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 area.
Myth: Appraisers are hired only to assess home values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform 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: A home inspection report has a completely different purpose than an appraisal. The job of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. House inspectors will create a report that will determine the condition of the house and its major components and possible damage.