Myth: Assessed value generally will be equal to 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.
Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged time.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the property will vary.
Reality: There is no real interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the house.
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 external party to buy or sell.
The dollar amount demanded to rebuild a home is what forms the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to figure out the value of a house.
Reality: An appraisal is an amalgamation of data concluded from the home's size, location, proximity to undesirable facilities, the condition of the home and the values of recent comparable sales. You can depend on WalshStreet Appraisals's appraisers to be forthright in assessing this information.
Myth: As homes increase in value by a certain percentage - in a strong economy - the houses within the same neighborhood are figured to increase by the same amount.
Reality: Any value an appraiser reports concerning a specific house is always individualized, based on certain factors pulled from the information of comparable houses and other specifications within the property itself.
It doesn't matter if the economy is doing well or declining.
Myth: Just seeing what the house looks like on its exterior gives a good idea of its value.
Reality: To find a solid value beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and market trends.
An outside-only inspection certainly can't provide all of the data needed.
Myth: Since you're the one paying for the appraisal report when applying for your loan to purchase or refinance your home, you own the provided appraisal report.
Reality: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal.
Home buyers have to be provided with a version of the document upon written request due to the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the appraisal report contains so long as their lending agency is satisfied.
Reality: A consumer should definitely read through their appraisal; there might be some questions or some concerns about the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes an invaluable record for future reference, containing helpful and often-revealing information - 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 vicinity.
Myth: Appraisals are ordered only to estimate home values in house sales involving mortgage-lending deals.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a lot of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal does not serve the same purpose as an inspection report.
The purpose of an appraisal report is to arrive at an opinion of market value during the appraisal process and the completion of the report.
House inspectors will produce a report that will express the condition of the house and its major components and possible damage.