4 Home Appraisal Stories You Need to Stop Believing in Arizona
During both the buying and selling process, the appraisal is a main step on both sides of the real estate sale. And in most cases, the appraisal (or the valuation) seems to be one person’s opinion and a complicated step.
In actuality, the appraisal is driven by data and neighborhood statistics from similar homes. That’s why it’s important not to believe these four home appraisal stories in the Arizona.
1. The Appraiser Works for and is on the Side of the Buyer
One of the most common misunderstandings is that the appraiser works for the buyer. This causes many to think that the valuation will lean in favor of the buyer. The buyer does in fact pay for the appraisal while in escrow, but it’s a required cost by the lender. The appraisal works for the lender to value the home to make sure the lender is making a good investment.
It doesn’t matter what the purchase price on the contract is, or what the buyer and seller think the home is worth. It is a criminal offense to pressure an appraiser into coming up with a certain value and appraisers answer to government regulatory agencies. Therefore, they have to come up with a valuation based on data rather than the opinion of the parties involved.
2. More Amenities and Bigger House Mean Higher Valuation
Upgrades, improvements, many amenities, and lots of square footage don’t necessarily translate into a higher valuation. A home appraisal just isn’t that simple.
The value of a house is calculated on the basis of sales data for similar homes in the neighborhood. So if a house is more amenity filled and much larger than all others in the neighborhood, then the appraiser won’t have any sales data to work with. In that case, the larger home with all the bells and whistles may not be appraised for what the parties involved think it’s worth. Basically, if surrounding houses (that have been appraised and/or sold) were built on the lot of the house in question, that’s what would be used to determine its appraised value.
3. An Appraisal Equals a Home Inspection
Another of the home appraisal stories that you need to stop believing in Arizona is that an appraisal is the same as an inspection. Both inspectors and appraisers look ar a property to determine the condition, that’s where the similarity of the two ends. They are both safety measures for the buyer and lender, but their main purposes are different.
An inspection is done to find and make the buyer aware of any current problems, and even potential problems in the future. The appraiser is hired to determine the market value of the property based on similar neighborhood sales. The appraiser will make notes about conditions of wiring, plumbing, roof, etc, but this is only so they can determine the value of the property for the lender.
4. There’s Nothing You Can Do About a Low Home Appraisal in Arizona
As a seller, if the appraisal comes in low, there are options. Mistakes do happen and sometimes these mistakes can kill the sale.
In this case, you can do a reconsideration of value. The Agent can provide comps and notes to the appraisal and request a review. Sometimes the appraiser misses a certain comparable property or thought it wasn’t a good fit. But, this can help them give it a look one more time and potentially come to a different valuation. Real estate experts do recommend that you get your own appraisal before the lender’s appraisal ever occurs. Keep in mind that federal law says you must supply a copy of the appraisal to consumers who request it in writing.
IF YOU’RE ENTERING THE REAL ESTATE MARKET IN Arizona, THEN, JUST BEWARE OF THESE HOME APPRAISAL STORIES.
AND WHETHER YOU’RE A BUYER OR A SELLER, WE CAN HELP. CONTACT US BY PHONE AT (602) 529-3380 OR FILL OUT THE ONLINE FORM.
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