Appraisal myths debunked
Legally, a real estate appraiser has to be state certified to create substantiated appraisal reports for federally-supported transactions. You are also entitled by law to request a copy of the finished report from your lender. Contact Desert Sky Appraisers if you have any concerns about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
Fact: It is probable that Arizona, like most states, supports the idea that the assessed value is no different from the market value; however, this is not always true. Usually when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the value of the house will vary.
Fact: The appraiser has no personal interest in the result of the appraisal report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement cost of the house will be is on par with the market value.
Fact: Market value is found by what a willing buyer would likely pay a willing seller for a certain home, with neither being under undue influence to buy or sell. Replacement value is the dollar amount needed to reconstruct a house in-kind.
Myth: There are certain methods that real estate appraisers use to find the opinion of value of a home, like the price per square foot.
Fact: An appraisal is an amalgamation of data based on the house's size, location, proximity to certain facilities, the condition of the home and the worth of recent comparable sales. You can count on Desert Sky Appraisers's appraisers to be ethical in assessing this information.
Myth: In a robust economy - when the worth of houses in a given county are reported to be appreciating by a certain percentage - the prices of individual homes in the area can be expected to increase by that same percentage.
Fact: Worth appreciation of a certain house must be determined on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the house itself. This is true in fair economic times as well as poor.
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Myth: The home's exterior is determinate of the actual price of the home; there is no need to do an interior inspection.
Fact: Property worth is determined by a number of factors, including location, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the information required.
Myth: Considering that the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, consumers have to be given a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it meets the necessities of their lender.
Fact: It is a very good idea for consumers to go through 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. An appraisal can serve as a record for the future, containing a great deal of 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the price of a house during a sales transaction involving a lending institution.
Fact: Based upon their qualifications and designations, appraisers can and often do perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection report.
Fact: A home inspection report has a completely different purpose than an appraisal. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. The task of a home inspector is to approximate the condition of the property and its major components, then create a report on their findings.