Myth: Assessed value generally will be the same as market value.
Reality: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always.
Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the neighborhood have not been reassessed for years or more, it may vary widely.
Myth: The value of a property will be different depending upon if the appraisal is provided for the buyer or the seller.
Reality: The price of the home does not affect the pay of the appraiser; due to this, the appraiser has no vested interest in the value of the house. This means that he will render business with impartiality and independence regardless of for whom the appraisal is created.
Myth: Market value will be the same as replacement cost.
Reality: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any outside party to buy or sell.
Replacement value is the dollar amount necessary to rebuild a house in-kind.
Myth: There are specific methods that real estate appraisers use to show the value of a house, like the price per square foot.
Reality: There are many numerous ways that an appraiser will use to make an in-depth analysis 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: When the economy is robust and the sales prices of houses are reported to be rising by a certain percentage, the other houses in the area can be expected to appreciate based on that same percentage.
Reality: The appreciation of a specific house is always determined on an individualized basis, factoring in information on comparable homes and other relevant specifications within the home itself.
It makes no difference whether the economy is robust or poor.
Myth: You can commonly see what a home is worth simply by looking at the outside.
Reality: To determine a solid value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from simply looking at the house from the outside.
Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your home, you own the produced appraisal report.
Reality: Legally, the report is owned by the lending company unless the lender releases their interest in the report.
Home buyers must be given a version of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: There's no reason for home buyers to even worry about what the appraisal report contains so long as their lending institution is fine with the contents therein.
Reality: A home buyer should definitely look through their document; there may be some questions or some worries about the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is an incredible amount of data stored in a report that should 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: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a variety 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: Appraisal reports are nothing like a home inspection report.
An appraiser forms an opinion of value in the appraisal process and resulting report.
A home inspector analyzes the condition of the property and its main components and reports their findings.
