Myth: Assessed value generally will be the same as market value.
Reality: While most states back the idea that assessed value is the same as estimated market value, this often is not the case.
Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are excellent examples of why there might be a differential in price.
Myth: The opinion of value of a property will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, no matter of for whom the appraisal is conducted.
Myth: Market value will mirror replacement cost.
Reality: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a house without being under influence from any outside group to buy or sell.
The replacement cost is the dollar amount needed to reconstruct a property in-kind.
Myth: Certain methods, like the price per square foot of the property, are what appraisers use to ascertain the value of a house.
Reality: Appraisers complete a full analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: As houses increase in value by a specific percentage - in a strong economy - the properties in proximity are figured to appreciate by the same amount.
Reality: Any value an appraiser derives concerning a certain property is always personalized, based on certain factors found from the information of comparable homes and other specifications within the house itself.
It doesn't matter if the economy is on the rise or declining.
Myth: The home's outside 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 factors that show the value of a home; these factors include area, condition, improvements, amenities, and market trends.
An external inspection certainly can't provide all of the information needed.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their property, they legally own their appraisal report.
Reality: Unless a lender releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal.
Consumers have to be supplied with a copy of the document through request due to the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the requirements of their lending company.
Reality: It is a very good idea for home buyers to check over a copy of their appraisal report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
An report can serve as a record for the future, since it contains a great deal of data - including, but not limited to 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending company.
Reality: Depending upon their qualifications and designations, appraisers can and will perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: An appraisal does not serve the same purpose as an inspection report.
The task of the appraiser is to find an opinion of value in the appraisal process and through creating the report.
The point of a home inspector is to approximate the condition of the house and its major components, then write a report on these conclusions.
