Myth: Assessed value generally will equate market value.
Reality: It might be that Arizona, like most states, validates the suggestion that the assessed value is the same as the market value; however, this is not always true.
Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby properties are exact examples of why there might be a differential in price.
Myth: The buyer or the seller can have an influence in the value of the house depending upon for whom the appraiser is working.
Reality: 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 provided.
Myth: The replacement cost of the property will be on par with the market value.
Reality: Market value is derived from what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under undue influence to buy or sell.
Replacement value is the dollar amount required to rebuild a home in-kind.
Myth: There are certain ways that real estate appraisers use to determine the value of a house, like the price per square foot.
Reality: Appraisers make an exhaustive analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: In a robust economy - when the sales prices of houses in a given region are reported to be rising by a particular percentage - the prices of individual houses in the vicinity can be expected to increase by that same percentage.
Reality: All increase of value is on an individual basis, found by data on relevant conditions and the data of comparable houses.
This is true in robust economic times as well as poor.
Myth: Just examining what the home looks like on the outside gives a good idea of its value.
Reality: Property value is determined by a multitude of variables, including area, condition, improvements, amenities, and market trends.
Obviously, none of these variables can be derived simply by examining the home from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to purchase or refinance your home, you own the provided appraisal report.
Reality: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document.
However, consumers have to be supplied with a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their report so long as it satisfies the requirements of their lending institution.
Reality: A consumer should definitely read through their report; there may be some questions or some worries about the accuracy of the analysis 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, containing helpful 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending company.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a variety of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is the same as a home inspection report.
Reality: An appraisal report does not fulfill the same purpose as an inspection report.
The task of the appraiser is to form an opinion of value in the appraisal process and through producing the report.
The purpose of a home inspector is to assess the condition of the property and its main components, then compose a report on their inspection.