Appraisal myths debunked
It is mandated by the government that a real estate appraiser needs to be state-licensed to offer appraisals for federally-related real estate transactions in Arizona. Also by law, you have the ability to request a copy of the finished appraisal from your lender. Contact West Valley Appraisal Services if you have any questions about the appraisal procedure.
Myth: Assessed value generally will equate to market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby houses are excellent examples of why the price can vary.
Myth: The appraised value of a house will vary depending upon if the appraisal is provided 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, despite for whom the appraisal is ordered.
Myth: The replacement cost of the property is always is on par with the market value.
Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside party to buy or sell. If the home were rebuilt, the dollar amount required to do so would form the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the worth of a property.
Fact: Appraisers complete a full analysis of all factors in consideration to the worth of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: In a strong economy - when the sales prices of houses in a given region are found to be rising by a certain percentage - the values of individual houses in the proximity can be expected to rise by that same percentage.
Fact: Worth appreciation of a specific house must be determined on an individualized basis, factoring in data on comparable homes and other relevant considerations. It makes no difference if the economy is robust or poor.
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Myth: You can usually find what a property is worth simply by looking at the outside.
Fact: Property worth is determined by a number of variables, including location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived just by looking at the property from the outside.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance real estate, they legally own their appraisal report.
Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be given one by their lending company.
Myth: It doesn't concern consumers what's in the report so long as it meets the needs of their lender.
Fact: Only if consumers check out a copy of their appraisal report 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 report can double as a record for the future, since it contains an incredible amount 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 order an appraisal unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending agency.
Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. The purpose of a home inspector is to approximate the condition of the house and its major components, then write a report on these inspection.