Myth: Market value should be equivocal to the assessed value of the property.
Reality: It is possible that California, like most states, supports the common myth that the assessed value is the same as the market value; however, this is not always true.
Usually when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for years or more, it may vary widely.
Myth: The buyer or the seller will have leverage in the cost of the property depending upon for whom the appraiser is working.
Reality: The appraiser has no personal interest in the result of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Reality: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under duress to buy or sell.
The dollar amount necessary to rebuild a property is what constitutes the replacement cost.
Myth: Specific methods, such as the price per square foot of the property, are the methods appraisers use to ascertain the value of a home.
Reality: There are many different formulae that an appraiser will use to make a comprehensive analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable properties.
Myth: When the economy is on the rise and the sales prices of homes are reported to be appreciating by a certain percentage, the other houses in the vicinity can be expected to increase based on that same percentage.
Reality: The appreciation of a certain home has to be concluded on an individualized basis, factoring in data on comparable properties and other relevant specifications within the property itself.
It makes no difference if the economy is excellent or poor.
Myth: The house's outside is determinate of the actual value of the house; there is no need to do an interior inspection.
Reality: There are a multitude of different factors that show the value of a home; these factors include location, condition, improvements, amenities, and market trends.
Obviously, none of these things can be found simply by inspecting the house from the outside.
Myth: Considering that the consumer is the person who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Reality: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal.
However, consumers have to be provided with a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even worry about what the appraisal contains so long as their lending company is satisfied.
Reality: A consumer should definitely look through their document; there may be some questions or some worries about the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An report can double as a record for the future, as it contains a great deal of data - 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: Appraisers are hired only to assess house values in property sales involving mortgage-lending deals.
Reality: Hiring an appraiser can fulfill a variety of needs 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: There's no reason to get an appraisal if you order a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection report.
The job of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report.
The task of a home inspector is to find the condition of the property and its major components, then produce a report on these findings.