Myth: Market value will always be the same as the assessed value of the property.
Reality: While most states support the idea that assessed value approximates estimated market value, this generally is not the case.
Usually when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for years or more, it may vary widely.
Myth: The value of a home will vary depending upon whether the appraisal is produced for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should match the replacement cost of the home.
Reality: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under duress to buy or sell.
Replacement value is the dollar amount needed to rebuild a house in-kind.
Myth: There are specific methods that real estate appraisers use to determine the opinion of value of a property, like the price per square foot.
Reality: Appraisers make an exhaustive analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: When the economy is robust and the sales prices of homes are found to be rising by a certain percentage, the other properties in the area can be expected to increase based on that same percentage.
Reality: Any value an appraiser reports in regards to a specific property is always personalized, based on certain factors pulled from the data of comparable properties and other considerations within the home itself.
This is true in strong economic times as well as bad.
Myth: The house's outside is determinate of the expected price of the house; it is unnecessary to do an interior inspection.
Reality: To conclude a genuine value beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and current market trends.
An outside-only inspection certainly can't provide all of the data needed.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their house, they legally own their appraisal.
Reality: Legally, the document is owned by the lending agency unless the lender relinquishes their interest in the appraisal.
Consumers have to be supplied with a copy of the document upon written request as per the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even worry about what the appraisal report contains so long as their lending company is fine with the contents therein.
Reality: Only when home buyers check out a copy of their appraisal report can they ensure its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
An report can serve as a record for the future, containing an exorbitant amount of data - including, but certainly 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 area.
Myth: The only reason someone would order an appraisal is if a home needs its value assessed in a lender-based sales transaction.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a lot of different services including - but 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: A home inspection report has a completely different purpose than an appraisal report.
The appraiser finds an opinion of value in the appraisal process and resulting document.
House inspectors will create a report that will show the condition of the property and its major components and possible damage.