Appraisal myths & facts

It is required by legal agencies that an appraiser is required to be state-licensed to produce appraisals for federally-related real estate sales in Arizona. Also by law, you are entitled to request a copy of the finished appraisal report from your lender. Contact our professional staff if you have any questions about the appraisal process.

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

Fact: It could be that Arizona, like most states, validates the suggestion that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.

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

Fact: There is no vested interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is written.

Myth: Market value should equal replacement cost.

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. The dollar amount necessary to reconstruct a property is what forms the replacement cost.

Myth: Appraisers use a formula, like a certain price per square foot, to figure out the value of a house.

Fact: An appraisal is an amalgamation of information concluded from the house's size, location, proximity to undesirable facilities, the condition of the home and the worth of recent comparable sales. You can depend on Desert Sky Appraisers's appraisers to be professional in assessing this information.

Myth: In a strong economy - when the worth of houses in a given county are reported to be rising by a particular percentage - the values of individual houses in the vicinity can be expected to appreciate by that same percentage.

Fact: Any value at which an appraiser arrives in regards to a certain house is always personalized, based on certain factors concluded from the information of comparable properties and other considerations within the home itself. It makes no difference if the economy is robust or terrible.

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

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

Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their property, they legally own their appraisal report.

Fact: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the document. Because of the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with it by their lending agency.

Myth: Consumers need not worry about what is in their document so long as it exceeds the necessities of their lending group.

Fact: Only if home buyers look at a copy of their appraisal report can they verify its accuracy and possibly need to question the result. 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 can 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 region.