Common myths about appraising

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related purchases. Also by law, you are entitled to receive a copy of the finished report from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Market value will be similar to the assessed value of the property.

Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Often when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the Scottsdale have not been reassessed for quite some time, it may vary wildly.

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

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

Myth: Any time market value is established, it should equate to the replacement cost of the home.

Fact: The way market value is derived is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside group to purchase or sell. The replacement cost is the dollar amount required to rebuild a house in-kind.

Myth: Appraisers use a calculation, like a certain price per square foot, to come to the worth of a home.

Fact: An appraisal report is an assertion of information concluded from the property's size, location, proximity to certain facilities, the condition of the house and the worth of recent comparable sales. You can depend on Arizona Valleywide Appraisals, LLC's staff to be professional in assessing this data.

Myth: In a powerful economy - when the worth of homes in a given neighborhood are found to be increasing by a certain percentage - the prices of individual properties in the proximity can be expected to rise by that same percentage.

Fact: Any cost at which an appraiser arrives concerning a particular property is always personalized, based on certain factors pulled from the data of comparable properties and other specifications within the property itself. It doesn't matter if the economy is doing well or declining.

Myth: Just examining what the property looks like on its exterior gives an excellent idea of its value.

Fact: There are a number of different variables that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just looking at the home from the exterior.

Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance real estate, you own the produced appraisal.

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

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the necessities of their lender.

Fact: Only if home buyers examine a copy of their 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. An appraisal report can double as a record for the future, since it contains an incredible amount of information - 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.