Appraisal myths debunked

It is enforced by law that a real estate appraiser is required to be state-licensed to offer appraisals for federally-supported property purchases in Arizona. Also by law, you are entitled to demand a copy of the completed appraisal from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Market value has to be the same as the assessed value of the property.

Fact: While most states uphold the idea that assessed value equates estimated market value, this usually is not the case. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby houses are prime examples of why there might be a differential in price.

Myth: The buyer or the seller may have some pull in the value of the house depending upon for whom the appraiser is working.

Fact: The cost of the home does not affect the salary of the appraiser; because of this, the appraiser has no vested interest in the opinion of value of the house. This means that he will provide services with impartiality and independence regardless for whom the appraisal is created.

Myth: The replacement cost of the property will be is on par with the market value.

Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any external group to purchase or sell. If the property were reconstructed, the dollar amount necessary to do so would make up the replacement cost.

Myth: Specific methods, such as the price per square foot, are the ways appraisers use to come to the value of a house.

Fact: An appraisal report is an assertion of data concluded from the home's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can count on Childress and Associates's staff to be professional in assessing this data.

Myth: When the economy is doing well and the value of homes are reported to be appreciating by a certain percentage, the other homes in the vicinity can be expected to rise based on that same percentage.

Fact: Any cost at which an appraiser concludes in regards to a particular house is always personalized, based on certain factors derived from the information of comparable properties and other specifications within the home itself. It makes no difference whether the economy is robust or terrible.

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

Fact: There are a number of different variables that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these things can be derived simply by viewing the home from the outside.

Myth: Because the consumer is the person who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal. Consumers must be provided with a copy of the document through request as per the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even care about what the report contains so long as their lending company is fine with the contents therein.

Fact: Only if consumers examine a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, containing useful and often-revealing data - 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 vicinity.