Myth: Assessed value generally will equate market value.
Reality: It might be that Arizona, like most states, supports 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 reconstruction has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an extended time.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the value of the property will vary.
Reality: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is created.
Myth: Market value should be the same as replacement cost.
Reality: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under pressure to buy or sell.
Replacement cost is the dollar amount necessary to reconstruct a property in-kind.
Myth: There are specific ways that appraisers use to find the value of a house, like the price per square foot.
Reality: There are many varied ways that an appraiser will use to make a full investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to specific facilities and the values of recently sold comparable properties.
Myth: As houses increase in value by a certain percentage - in a robust economic state - the homes nearby are expected to increase by the same amount.
Reality: Any value an appraiser reports in regards to a particular property is always individualized, based on certain factors derived from the data of comparable homes and other considerations within the house itself.
It makes no difference whether the economy is excellent or bad.
Myth: Just looking at what the property looks like on its exterior gives an idea of its value.
Reality: To find a definite value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends.
As you can see, none of these factors can be found simply by inspecting the property from the exterior.
Myth: Since you're the one providing the money for the appraisal report when applying for the loan to purchase or refinance your home, you own the provided appraisal.
Reality: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal.
Consumers have to be supplied with a copy of the document upon written request because of the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even worry about what the appraisal report contains so long as their lending company is fine with the contents therein.
Reality: A home buyer should definitely read through their report; there might be some questions or some concerns about the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes an excellent record for future reference, filled with helpful and often-revealing data - including 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: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and may perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: A home inspection report serves a completely different purpose than an appraisal.
The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report.
The point of a home inspector is to find the condition of the property and its main components, then compose a report on these findings.
