Myth: Assessed value should be similar 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 remodeling has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged period of time.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the cost of the home will vary.
Reality: The cost of the home does not affect the payment of the appraiser; as a result, the appraiser has no pressured interest in the value of the house. Obviously, he will render task with impartiality and independence regardless of for whom the appraisal is produced.
Myth: Any time market value is determined, it should match the replacement cost of the house.
Reality: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a house without being under pressure from any external party to purchase or sell.
If the home were reconstructed, the dollar amount necessary to do so would set the replacement cost.
Myth: Certain formulae, like the price per square foot of the property, are the ways appraisers use to determine the value of a home.
Reality: There are many varied calculations that an appraiser will use to make an in-depth analysis 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 houses.
Myth: When the economy is doing well and the sales prices of houses are found to be increasing by a certain percentage, the other homes in the proximity can be expected to rise based on that same percentage.
Reality: Any value an appraiser derives in regards to a specific property is always individualized, based on certain factors pulled from the information of comparable properties and other specifications within the house itself.
It doesn't matter if the economy is on the rise or declining.
Myth: The property's outside is determinate of the expected price of the house; it is unnecessary to do an interior appraisal.
Reality: Property value is determined by a multitude of factors, including area, condition, improvements, amenities, and market trends.
An outside-only inspection certainly can't provide all of the data required.
Myth: Since you're the one providing the money for the appraisal report when applying for the loan to purchase or refinance your house, you own the ordered appraisal report.
Reality: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal.
Home buyers must be provided with a copy of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their report so long as it meets the requirements of their lending group.
Reality: A consumer should definitely inspect their report; there may be some questions or some worries with the accuracy of the inspection that need to 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, containing an incredible 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 vicinity.
Myth: The only reason someone would order an appraisal is if a home needs its value assessed in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Reality: An appraisal does not fulfill the same purpose as an inspection report.
The appraiser concludes on an opinion of value in the appraisal process and resulting report.
The point of a home inspector is to assess the condition of the house and its major components, then write a report on their findings.
