Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Reality: While most states back the concept that assessed value is the same as estimated market value, this generally is not the case.
Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby homes are excellent examples of why this occurs.
Myth: The value of a property will differ depending upon if the appraisal is conducted for the buyer or the seller.
Reality: The appraiser has no personal interest in the result of the report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should mirror replacement cost.
Reality: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific house.
The dollar amount needed to reconstruct a home is what constitutes the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to arrive at the value of a home.
Reality: Appraisers make an exhaustive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: In a robust economy - when the prices of houses in a given county are found to be rising by a certain percentage - the prices of individual houses in the proximity can be expected to rise by that same percentage.
Reality: The appreciation of a certain house has to be concluded on an individualized basis, factoring in data on comparable properties and other relevant specifications within the house itself.
This is true in good economic times as well as poor.
Myth: The property's outside is determinate of the actual value of the home; there is no need to do an interior appraisal.
Reality: There are a multitude of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be found just by looking at the property from the outside.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their house, they own their appraisal report.
Reality: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the report.
Consumers must be given a copy of the report upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it meets the needs of their lender.
Reality: It is almost imperative for home buyers to read 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 veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes a valuable record for future reference, filled with 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 area.
Myth: The only reason someone would order an appraisal is if a home needs its value estimated in a lender sales transaction.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a lot 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: You don't need to get an appraisal if you order a home inspection.
Reality: Appraisal reports are nothing like a home inspection.
The function of an appraisal is to conclude upon an opinion of market value during the appraisal process and the production of the report.
House inspectors will write a report that will express the condition of the property and its major components and possible damage.
