Myth: Assessed value will always be the same as market value.
Reality: While most states support the idea that assessed value approximates estimated market value, this commonly is not the case.
Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged period.
Myth: The appraised value of a property will differ depending upon whether the appraisal is produced for the buyer or the seller.
Reality: The price of the property does not affect the salary of the appraiser; because of this, the appraiser has no pressured interest in the price of the home. Obviously, he will conduct task with impartiality and objectivity regardless of for whom the appraisal is provided.
Myth: The replacement cost of the house is always in line with the market value.
Reality: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home.
Replacement cost is the dollar amount needed to reconstruct a home in-kind.
Myth: Certain formulae, such as the price per square foot of the property, are what appraisers use to arrive at the value of a house.
Reality: There are many varied ways that an appraiser will use to make a comprehensive investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the values of recently sold comparable homes.
Myth: In a strong economy - when the prices of houses in a given county are found to be increasing by a particular percentage - the values of individual houses in the vicinity can be expected to rise by that same percentage.
Reality: Any value an appraiser derives concerning a particular house is always individualized, based on certain factors found from the data of comparable properties and other specifications within the home itself.
This is true in excellent economic times as well as poor.
Myth: Just looking at what the property looks like on its exterior gives a good idea of its value.
Reality: Property value is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends.
Obviously, none of these things can be found simply by inspecting the home from the outside.
Myth: Since you're the one providing the money for the appraisal report when applying for your loan to purchase or refinance real estate, you own the produced appraisal.
Reality: Legally, the appraisal is owned by the lending company unless the lender relinquishes their interest in the report.
However, consumers must be provided with a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the necessities of their lending agency.
Reality: Only when home buyers look at a copy of their appraisal 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.
There is a great deal of information stored in an appraisal that could be useful to the home buyer 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no need to get an appraisal if you order a home inspection.
Reality: Appraisal reports are nothing like a home inspection report.
An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal.
A home inspector analyzes the condition of the home and its major components and reports these findings.