Myth: Market value will always be the same as the assessed value of the property.
Reality: While most states uphold the idea that assessed value approximates estimated market value, this usually is not the case.
Interior reconstruction 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 opinion of value of a home will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the appraisal report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value of the property is always in line with the market value.
Reality: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under undue influence to buy or sell.
The dollar amount needed to reconstruct a house is what shows the replacement cost.
Myth: Specific methods, like the price per square foot of the property, are the ways appraisers use to arrive at the value of a property.
Reality: Appraisers complete a detailed analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: As homes appreciate by a certain percentage - in a robust economic state - the properties in proximity are expected to increase by the same amount.
Reality: Any value an appraiser derives in regards to a particular house is always individualized, based on certain factors concluded from the data of comparable houses and other specifications within the house itself.
It makes no difference whether the economy is good or bad.
Myth: Just examining what the home looks like on the outside gives an excellent idea of its value.
Reality: Home value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from just viewing the home from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance your house, you own the ordered appraisal.
Reality: Unless a lender releases its interest in the document, it is legally owned by the lending company that purchased the appraisal.
However, home buyers have to be supplied with a copy of the report upon written request, due to the Equal Credit Opportunity Act.
Myth: Consumers need not be concerned with what is in their appraisal so long as it exceeds the necessities of their lending institution.
Reality: Only when home buyers look through a copy of their report can they double-check its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of data stored in a report that can be useful to the home buyer in the future, such as 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: Appraisers are hired only to estimate real estate property values in house sales involving mortgage-lending transactions.
Reality: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no reason to get an appraisal if you have had a home inspection.
Reality: Appraisal reports are definitely not the same as a home inspection report.
The appraiser finds an opinion of value in the appraisal process and resulting document.
House inspectors will produce a report that will show the condition of the property and its major components and possible damage.
