Myth: Assessed value generally will be similar to market value.
Reality: While most states back the suggestion that assessed value equates estimated market value, this often is not the case.
Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended period of time.
Myth: The opinion of value of a home will differ depending upon whether the appraisal is conducted for the buyer or the seller.
Reality: The opinion of value of the house does not affect the salary of the appraiser; because of this, the appraiser has no pressured interest in the price of the house. What this means is he will conduct business with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: Market value will be the same as replacement cost.
Reality: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain property, with neither being under duress to buy or sell.
If the home were reconstructed, the dollar amount necessary to do so would set the replacement cost.
Myth: Certain formulae, such as the price per square foot of the property, are what appraisers use to ascertain the value of a home.
Reality: There are many numerous formulae that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable houses.
Myth: As properties increase in value by a certain percentage - in a robust economy - the houses in proximity are figured to increase by the same amount.
Reality: The appreciation of a specific property is always concluded on a case-by-case basis, factoring in data on comparable homes and other relevant specifications within the home itself.
This is true in robust economic times as well as bad.
Myth: The property's outside is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Reality: There are a multitude of different variables that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends.
An exterior inspection definitely can't provide all of the data necessary.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance your home, you own the produced appraisal.
Reality: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal.
However, consumers must be provided with a copy of the document upon written request, because of the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal so long as it satisfies the requirements of their lending institution.
Reality: It is very important for home buyers to look at a copy of their report so that they can verify the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a wealth of information contained in an appraisal report 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 home needs its value estimated in a lender-based sales transaction.
Reality: Appraisers can have many different qualifications and designations which allow them to perform a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no reason to get an appraisal if you order a home inspection.
Reality: An appraisal does not serve the same purpose as an inspection report.
The appraiser concludes on an opinion of value in the appraisal process and resulting report.
House inspectors will produce a report that will determine the condition of the house and its major components and possible damage.
