Myth: The value that is ascertained by the appraiser must be exactly the same as the market value.
Reality: While most states back the suggestion that assessed value is the same as estimated market value, this usually is not the case.
Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period.
Myth: The appraised value of a house will differ depending upon if the appraisal is produced for the buyer or the seller.
Reality: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is ordered.
Myth: Any time market value is determined, it should match the replacement cost of the home.
Reality: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property.
Replacement value is the dollar amount necessary to rebuild a home in-kind.
Myth: Certain methods, such as the price per square foot, are the methods appraisers use to arrive at the value of a property.
Reality: Appraisers make an exhaustive analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: When the economy is robust and the sales prices of properties are found to be appreciating by a certain percentage, the other houses in the area can be expected to rise based on that same percentage.
Reality: All increase of value is on a one-on-one basis, determined by data on relevant considerations and the data of comparable properties.
This is true in excellent economic times as well as poor.
Myth: The home's exterior is determinate of the actual value of the house; there is no need to do an interior inspection.
Reality: There are a multitude of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends.
An outside-only inspection certainly can't provide all of the data necessary.
Myth: Because the consumer is the party who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: Legally, the appraisal is owned by the lender unless the lender releases their interest in the report.
By the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with it by their lending agency.
Myth: It doesn't matter to consumers what's in the report so long as it satisfies the necessities of their lending agency.
Reality: It is almost imperative for consumers to check over a copy of their appraisal report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is an incredible amount of data stored in a report that can be useful to the consumer 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: The only reason someone would order an appraisal is if a house needs its value assessed in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is the same as a home inspection report.
Reality: A home inspection report has a completely different purpose than an appraisal.
The job of the appraiser is to form an opinion of value in the appraisal process and through creating the report.
A home inspector assesses the condition of the home and its major components and reports these findings.
