Appraisal myths debunked

It is required by law that a real estate appraiser needs to be state-licensed to offer appraisal reports for federally-supported property transactions in Arizona. The law gives you the right to receive a copy of your completed appraisal report from your lending agency after it has been provided. Contact A-Z Residential Appraisals if you have any questions about the appraisal process.

Myth: Market value must be similar to the assessed value of the property.

Fact: While most states back the suggestion that assessed value is equal to estimated market value, this often is not the case. At times when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the area have not been reassessed for quite some time, it may vary wildly.

Myth: The appraised value of a house will differ depending upon if the appraisal is produced for the buyer or the seller.

Fact: The appraiser has no personal interest in the outcome of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Market value should be the same as replacement cost.

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a house without being under duress from any external party to buy or sell. If the property were rebuilt, the dollar amount required to do so would set the replacement cost.

Myth: There are certain ways that appraisers use to find the opinion of value of a home, such as the price per square foot.

Fact: Appraisers make a detailed analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.

Myth: When the economy is robust and the sales prices of homes are found to be increasing by a certain percentage, the other homes in the vicinity can be expected to rise based on that same percentage.

Fact: All appreciation of worth is on an individual basis, found by information on relevant considerations and the data of comparable properties. It doesn't matter if the economy is doing well or declining.

Myth: The home's exterior is determinate of the actual price of the house; it is unnecessary to do an interior inspection.

Fact: Property value is concluded by a number of factors, including area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the information necessary.

Myth: Considering that the consumer is the party who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report. However, home buyers have to be supplied with a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their document so long as it satisfies the needs of their lending company.

Fact: It is very important for home buyers to read a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, containing a great deal 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 area.