Myth: Market value will always be equivocal to 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.
Sometimes when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for quite some time, it may vary widely.
Myth: The opinion of value of a property will vary depending upon whether the appraisal is ordered for the buyer or the seller.
Reality: The opinion of value of the property does not affect the salary of the appraiser; because of this, the appraiser has no pressured interest in the price of the property. Obviously, he will complete his task with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: The replacement cost of the home should 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 certain house, with neither being under pressure to buy or sell.
The dollar amount required to reconstruct a home is what shows the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to figure out the value of a property.
Reality: Appraisers complete an exhaustive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: As houses increase in value by a specific percentage - in a strong economic state - the houses within the same neighborhood are expected to appreciate by the same amount.
Reality: Any value an appraiser derives concerning a particular property is always individualized, based on certain factors found from the information of comparable properties and other specifications within the property itself.
It makes no difference whether the economy is robust or bad.
Myth: You can generally tell what a property is worth simply by looking at the exterior.
Reality: To conclude an accurate value beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends.
There's no possible way to get all of this information from just inspecting the home from the exterior.
Myth: Since the consumer is the party who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Reality: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal.
Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with it by their lender.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the necessities of their lending agency.
Reality: A consumer should definitely look through their document; there might 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 report makes a valuable record for future reference, containing helpful and often-revealing information - 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 vicinity.
Myth: Appraisers are hired only to estimate building values in property sales involving mortgage-lending deals.
Reality: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't need to get an appraisal if you get a home inspection.
Reality: An appraisal report does not serve the same purpose as an inspection.
The purpose of an appraisal report is to arrive at an opinion of market value during the appraisal process and the production of the appraisal report.
House inspectors will compose a report that will explain the condition of the house and its major components and possible damage.
