Myth: Market value will be the same as the assessed value of the property.
Reality: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always.
Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an extended period.
Myth: The appraised value of a home will change depending upon whether the appraisal is conducted for the buyer or the seller.
Reality: The price of the property does not affect the salary of the appraiser; due to this, the appraiser has no preconceived interest in the value of the home. Obviously, he will conduct business with impartiality and independence regardless of for whom the appraisal is produced.
Myth: The replacement value of the property should be on par with the market value.
Reality: The way market value is found is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside group to buy or sell.
If the house were reconstructed, the dollar amount required to do so would set the replacement cost.
Myth: There are certain ways that real estate appraisers use to determine the cost of a house, like the price per square foot.
Reality: There are many differing methods that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable homes.
Myth: When the economy is doing well and the sales prices of houses are reported to be rising by a certain percentage, the other homes in the vicinity can be expected to increase based on that same percentage.
Reality: Any value an appraiser derives in regards to a specific home is always individualized, based on certain factors found from the information of comparable properties and other considerations within the house itself.
This is true in robust economic times as well as poor.
Myth: Just examining what the home looks like on its exterior gives a good idea of its value.
Reality: To conclude a definite value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and market trends.
As you can see, none of these factors can be found just by looking at the house 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 your house, you own the ordered appraisal report.
Reality: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the document.
Home buyers must be supplied with a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal so long as it satisfies the requirements of their lending group.
Reality: It is almost imperative for home buyers to peruse a copy of their report so that they can double-check the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes an excellent 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 area.
Myth: Appraisers are hired only to assess real estate property values in property sales involving mortgage-lending deals.
Reality: Based upon their qualifications and designations, appraisers can and do provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not serve the same purpose as an inspection report.
The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal.
The job of a home inspector is to determine the condition of the house and its main components, then provide a report on their conclusions.