Myth: Assessed value should always be the same as market value.
Reality: While most states back the idea that assessed value equates estimated market value, this often is not the case.
Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are prime examples of why this occurs.
Myth: The buyer or the seller often will have impact in the cost of the property depending upon for whom the appraiser is working.
Reality: The value of the home does not affect the payment of the appraiser; due to this, the appraiser has no pressured interest in the opinion of value of the house. What this means is he will complete his job with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: The replacement value of the property is always in line with the market value.
Reality: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house.
If the home were reconstructed, the dollar amount needed to do so would make up the replacement cost.
Myth: There are specific methods that appraisers use to determine the opinion of value of a home, like the price per square foot.
Reality: There are many different calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the sales prices of recently sold comparable houses.
Myth: In a strong economy - when the sales prices of houses in a given region are found to be appreciating by a particular percentage - the values of individual properties in the area can be expected to rise by that same percentage.
Reality: All increase of value is on a one-on-one basis, concluded by information on relevant conditions and the data of comparable houses.
It doesn't matter if the economy is on the rise or declining.
Myth: The home's exterior is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Reality: To find a solid 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.
An outside-only inspection certainly can't provide all of the data needed.
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 provided appraisal report.
Reality: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document.
Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with one by their lending company.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the needs of their lender.
Reality: Only when home buyers read a copy of their appraisal report can they verify 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 an incredible amount of information contained in an appraisal that will probably 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 hire an appraiser is if a house needs its value estimated in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and often do provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no need to get an appraisal if you get a home inspection.
Reality: An appraisal does not serve the same purpose as an inspection.
The reason behind an appraisal is to form an opinion of market value during the appraisal process and the completion of the appraisal report.
A home inspector analyzes the condition of the house and its main components and reports these findings.