Myth: Market value has to be the same as the assessed value of the property.
Reality: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always.
Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the appraised value of the house will vary.
Reality: The price of the property does not affect the payment of the appraiser; as a result, the appraiser has no preconceived interest in the value of the house. What this means is he will provide job with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should match the replacement cost of the home.
Reality: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside party to buy or sell.
The dollar amount needed to rebuild a property is what shows the replacement cost.
Myth: Certain methods, such as the price per square foot of the property, are the methods appraisers use to arrive at the value of a home.
Reality: There are many varied processes that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable homes.
Myth: In a strong economy - when the values of homes in a given region are found to be increasing by a particular percentage - the values of individual houses in the proximity can be expected to increase by that same percentage.
Reality: Any value an appraiser derives in regards to a specific property is always personalized, based on certain factors concluded from the information of comparable properties and other considerations within the house itself.
It doesn't matter if the economy is on the rise or declining.
Myth: The house's outside is determinate of the expected price of the home; there is no need to do an interior appraisal.
Reality: House value is concluded by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from just examining the house from the outside.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they own their appraisal.
Reality: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report.
However, consumers have to be supplied with a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the needs of their lender.
Reality: It is a very good idea for home buyers to go through a copy of their appraisal report so that they can verify the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
An report can serve as a record for the future, containing an exorbitant amount of 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 vicinity.
Myth: Appraisers are hired only to assess building values in house sales involving mortgage-lending transactions.
Reality: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is no different than a home inspection report.
Reality: A home inspection report serves a completely different purpose than an appraisal report.
The point of an appraisal is to conclude upon an opinion of market value during the appraisal process and the production of the appraisal report.
A home inspector assesses the condition of the property and its main components and reports these findings.
