Appraisal myths debunked
It is enforced by law that a real estate appraiser needs to be state-licensed to produce appraisal reports for federally-related real estate transactions in Arizona. The law entitles you to receive a copy of your finished appraisal report from your lending agency after it has been provided. Contact West Valley Appraisal Services if you have any concerns about the appraisal procedure.
Myth: Market value has to be similar to the assessed value of the property.
Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an extended period.
Myth: The appraised value of a property will be different depending upon whether the appraisal is ordered for the buyer or the seller.
Fact: The value of the house does not affect the payment of the appraiser; as a result, the appraiser has no vested interest in the worth of the house. Obviously, he will conduct business with impartiality and objectivity regardless for whom the appraisal is produced.
Myth: Any time market value is found, it should be similar to the replacement cost of the house.
Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under undue influence to buy or sell. If the house were rebuilt, the dollar amount necessary to do so would make up the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the worth of a property.
Fact: Appraisers make a detailed analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: As homes appreciate by a certain percentage - in a robust economy - the houses nearby are expected to appreciate by the same amount.
Fact: Any value at which an appraiser concludes in regards to a specific house is always individualized, based on certain factors concluded from the information of comparable properties and other considerations within the house itself. This is true in fair economic times as well as poor.
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Myth: You can commonly find what a home is worth simply by looking at the exterior.
Fact: To determine an accurate worth beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these things can be found simply by viewing the house from the exterior.
Myth: Since the consumer is the party who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers have to be given a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the needs of their lending company.
Fact: A home buyer should definitely look through their appraisal; there might be some questions or some concerns with the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal that can be useful to the home buyer in the future, such as 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 region.
Myth: Appraisals are ordered only to assess building values in home sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a variety 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 house inspection serves the same purpose as an appraisal.
Fact: Appraisal reports have almost nothing in common with a home inspection report. The job of the appraiser is to come to an opinion of value in the appraisal process and through creating the report. A home inspector analyzes the condition of the home and its major components and reports these findings.