Appraisal myths debunked
Legally, an appraiser is required to be state certified to perform substantiated real estate appraisals for federally-backed sales. You have the ability to demand a copy of the completed report from your lender. Contact Assured Appraisals, LLC. if you have any concerns about the appraisal procedure.
Myth: Assessed value should always equate to market value.
Fact: It is probable that Arizona, like most states, validates the common myth that the assessed value equals 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 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: The buyer or the seller often will have leverage in the cost of the property depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the outcome of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is found, it should equal the replacement cost of the property.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain home, with neither being under pressure to buy or sell. If the home were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: Specific methods, such as the price per square foot, are the methods appraisers use to ascertain the worth of a home.
Fact: Appraisers complete a comprehensive analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: When the economy is robust and the worth of homes are found to be rising by a certain percentage, the other homes in the area can be expected to increase based on that same percentage.
Fact: Price increase of a certain property must be concluded on a case-by-case basis, factoring in data on comparable homes and other relevant considerations. This is true in fair economic times as well as bad.
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Myth: Just looking at what the home looks like on its exterior gives an excellent idea of its value.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from simply looking at the property from the exterior.
Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance your home, you own the produced appraisal report.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the appraisal. Consumers have to be given a copy of the appraisal report upon written request as per the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their appraisal report so long as it satisfies the necessities of their lending group.
Fact: A home buyer should definitely look through their appraisal report; there may be some questions or some concerns about the accuracy of the report that must be addressed. 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 an exorbitant amount of data - including, but certainly 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 proximity.
Myth: Appraisers are hired only to estimate building values in home sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and do perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is the same as a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. A home inspector analyzes the condition of the property and its main components and reports these findings.