Common myths about appraising

It is mandated by legal agencies that an appraiser is required to be state-licensed to perform appraisals for federally-related property sales in Arizona. You have the ability to receive a copy of the completed appraisal from your lending agency. Contact Northern Arizona Appraisal, Inc. if you have any questions about the appraisal procedure.

Myth: Assessed value should always be equal to market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Sometimes when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary wildly.

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

Fact: The appraiser has no vested interest in the result of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value will approximate replacement cost.

Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home. Replacement value is the dollar amount needed to reconstruct a property in-kind.

Myth: There are specific methods that appraisers use to find the cost of a home, such as the price per square foot.

Fact: Appraisers make an exhaustive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.

Myth: In a powerful economy - when the worth of houses in a given region are reported to be increasing by a particular percentage - the prices of individual properties in the area can be expected to increase by that same percentage.

Fact: All increase of worth is on a one-on-one basis, concluded by data on relevant elements and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.

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Myth: Just examining what the home looks like on its exterior gives an idea of its worth.

Fact: There are a multitude of different factors that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply looking at the home from the outside.

Myth: Since you're the one paying for the appraisal when applying for your loan to purchase or refinance your house, you own the provided appraisal.

Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. Home buyers must be given a version of the appraisal report through request as per the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the requirements of their lending company.

Fact: A home buyer should definitely look through their appraisal; there may be some questions or some concerns about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, filled with helpful and often-revealing information - 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 area.

Myth: The only reason someone would order an appraisal is if a property needs its value estimated in a lender sales transaction.

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: There's no need to get an appraisal if you order a home inspection.

Fact: A home inspection has a completely different purpose than an appraisal. The point of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the completion of 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 these conclusions.