Common myths about appraising

It is enforced by legal agencies that an appraiser must be state-licensed to write appraisals for federally-related property purchases in Arizona. The law allows you to acquire a copy of your completed appraisal from your lender after it has been provided. Contact Phoenix Valuations, LLC if you have any questions about the appraisal process.

Myth: Assessed value should be the same as to market value.

Fact: While most states support the suggestion that assessed value is equal to estimated market value, this commonly is not the case. Often when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller will have impact in the cost of the home depending upon for whom the appraiser is working.

Fact: The appraised value of the property does not affect the pay of the appraiser; as such, the appraiser has no personal interest in the worth of the property. Obviously, he will complete his job with impartiality and independence regardless for whom the appraisal is provided.

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

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a specific property, with neither being under duress to buy or sell. If the home were reconstructed, the dollar amount needed to do so would make up the replacement cost.

Myth: There are certain methods that appraisers use to show the cost of a house, such as the price per square foot.

Fact: There are many differing calculations that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable houses.

Myth: In a robust economy - when the sales prices of houses in a given county are found to be rising by a certain percentage - the costs of individual houses in the vicinity can be expected to appreciate by that same percentage.

Fact: Any price at which an appraiser concludes concerning a certain home is always personalized, based on certain factors found from the data of comparable houses and other considerations within the home itself. This is true in excellent economic times as well as bad.

Myth: The home's outside is determinate of the actual worth of the house; there is no need to do an interior inspection.

Fact: To conclude an accurate value beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived simply by looking at the property from the outside.

Myth: Since the consumer is the one who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.

Fact: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the appraisal. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given one by their lender.

Myth: Home buyers need not care about what is in their report so long as it meets the requirements of their lending company.

Fact: It is a very good idea for home buyers to look at a copy of their report so that they can double-check the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, as it contains 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 vicinity.