Myth: Assessed value should always equate market value.
Reality: While most states back the suggestion that assessed value equates estimated market value, this often is not the case.
Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The appraised value of a house will be different depending upon if the appraisal is conducted for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, no matter of for whom the appraisal is written.
Myth: Market value will equal replacement cost.
Reality: The way market value is derived is based on what a buyer would likely pay a willing seller for a house without being under influence from any outside party to buy or sell.
If the house were rebuilt, the dollar amount required to do so would be the replacement cost.
Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to ascertain the value of a house.
Reality: There are many numerous processes 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 certain facilities and the sales prices of recently sold comparable properties.
Myth: As properties appreciate by a specific percentage - in a robust economy - the properties within the same neighborhood are figured to increase by the same amount.
Reality: All increase of value is on a one-on-one basis, found by data on relevant elements and the data of comparable properties.
This is true in strong economic times as well as bad.
Myth: You can generally tell what a property is worth simply by looking at the exterior.
Reality: Property value is determined by a number of variables, including area, condition, improvements, amenities, and market trends.
Obviously, none of these things can be found just by inspecting the house from the outside.
Myth: Since you're the one paying for the appraisal report when applying for the loan to buy or refinance your home, you own the produced appraisal report.
Reality: Legally, the document is owned by the lending agency unless the lender relinquishes their interest in the appraisal.
Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given one by their lender.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the needs of their lending agency.
Reality: It is almost imperative for home buyers to look at a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes an invaluable 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 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 series 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 no different than a home inspection.
Reality: Appraisal reports are completely different than a home 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.
A home inspector analyzes the condition of the property and its main components and reports these findings.
