Myth: The value that is assessed by the appraiser is required to be the same as the market value.
Reality: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always.
At times when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the area have not been reassessed for a good length of time, it may vary widely.
Myth: The opinion of value of a house will be different depending upon if the appraisal is conducted for the buyer or the seller.
Reality: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is written.
Myth: Any time market value is calculated, it should equal the replacement cost of the property.
Reality: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property.
The dollar amount demanded to rebuild a home is what shows the replacement cost.
Myth: There are specific methods that appraisers use to find the opinion of value of a property, such as the price per square foot.
Reality: Appraisers complete a detailed analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: When the economy is doing well and the sales prices of homes are found to be appreciating by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.
Reality: All appreciation of value is on an individual basis, determined by information on relevant elements and the data of comparable houses.
This is true in strong economic times as well as poor.
Myth: Just seeing what the property looks like on the outside gives an idea of its value.
Reality: There are a number of different variables that conclude property value; these factors include area, condition, improvements, amenities, and market trends.
There's no possible way to get all of this data from just inspecting the home from the exterior.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their house, they own their appraisal.
Reality: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal.
However, consumers must be provided with a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the necessities of their lending company.
Reality: It is a very good idea for consumers to look at a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes an invaluable record for future reference, filled with useful 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 proximity.
Myth: Appraisers are hired only to assess home values in property sales involving mortgage-lending transactions.
Reality: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: Appraisal reports have almost nothing in common with a home inspection.
The reason behind an appraisal report is to find an opinion of market value during the appraisal process and the production of the report.
A home inspector analyzes the condition of the building and its main components and reports their findings.