Myth: Assessed value generally will equate market value.
Reality: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always.
Generally when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the area have not been reassessed for a good length of time, it may vary widely.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the value of the home will vary.
Reality: There is no vested interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is ordered.
Myth: Market value should mirror replacement cost.
Reality: Market value is found by what a willing buyer would likely pay a willing seller for a certain house, with neither being under pressure to buy or sell.
The dollar amount necessary to reconstruct a property is what forms the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to arrive at the value of a house.
Reality: There are many varied calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable houses.
Myth: As properties increase in value by a specific percentage - in a robust economy - the homes in proximity are expected to appreciate by the same amount.
Reality: Any value an appraiser derives in regards to a certain property is always personalized, based on certain factors derived from the data of comparable properties and other specifications within the home itself.
It makes no difference if the economy is good or on the decline.
Myth: Just seeing what the house looks like on the outside gives an idea of its value.
Reality: House value is concluded by a multitude of factors, including area, condition, improvements, amenities, and market trends.
An exterior inspection obviously can't provide all of the information needed.
Myth: Since the consumer is the person who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Reality: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal.
However, home buyers must be provided with a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even care about what the report contains so long as their lending agency is satisfied.
Reality: A home buyer should definitely read through their document; there might be some questions or some worries with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes a near perfect record for future reference, containing helpful and often-revealing data - 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: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender-based sales transaction.
Reality: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: A home inspection serves a completely different purpose than an appraisal report.
The appraiser finds an opinion of value in the appraisal process and resulting appraisal report.
House inspectors will write a report that will express the condition of the house and its major components and possible damage.
