Appraisal myths debunked
It is required by the government that an appraiser needs to be state-licensed to produce appraisal reports for federally-related property transactions in Arizona. You are also entitled by law to request a copy of the completed appraisal from your lender. Contact us if you have any questions about the appraisal procedure.
Myth: Market value will be the same as the assessed value of the property.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. There are times when interior remodeling has been done and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for years or more, it may vary wildly.
Myth: The opinion of value of a property will differ depending upon if the appraisal is provided for the buyer or the seller.
Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.
Myth: Market value will equate to replacement cost.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a certain house, with neither being under duress to buy or sell. The dollar amount demanded to rebuild a home is what shows the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the cost of a house.
Fact: An appraisal report is an amalgamation of information concluded from the home's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can rely on Grandview Appraisal Group's staff to be ethical in assessing this information.
Myth: As homes increase their worth by a specific percentage - in a strong economy - the homes in proximity are figured to increase by the same amount.
Fact: All appreciation of value is on an individual basis, concluded by information on relevant considerations and the data of comparable properties. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Maricopa County or Tempe, AZ?Contact our professional staff
Myth: You can usually tell what a home is worth simply by looking at the outside.
Fact: There are a multitude of different variables that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived simply by inspecting the house from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance your house, you own the produced appraisal.
Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that purchased the appraisal. Home buyers have to be given a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the requirements of their lending company.
Fact: A home buyer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an report that should be useful to the consumer in the future, such as 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: Appraisals are ordered only to assess building values in house sales involving mortgage-lending deals.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety 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: An appraisal report does not fulfill the same purpose as an inspection. The point of an appraisal is to find an opinion of fair market value during the appraisal process and the completion of the appraisal. The purpose of a home inspector is to approximate the condition of the house and its major components, then compose a report on their findings.