Myth: Market value must be equivocal to the assessed value of the property.
Reality: This usually isn't true; 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 properties in the area have not been reassessed for an prolonged time.
Myth: The value of a house will be different depending upon if the appraisal is conducted for the buyer or the seller.
Reality: The appraiser has no vested interest in the result of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter 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 different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house.
The dollar amount needed to reconstruct a home is what forms the replacement cost.
Myth: There are specific methods that appraisers use to determine the cost of a property, such as the price per square foot.
Reality: There are many varied processes 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 undesirable facilities and the sales prices of recently sold comparable properties.
Myth: As homes appreciate by a specific percentage - in a strong economic state - the homes around the appreciating properties are figured to appreciate by the same amount.
Reality: All appreciation of value is on an individual basis, concluded by data on relevant considerations and the data of comparable houses.
It doesn't matter if the economy is doing well or declining.
Myth: Just examining what the house looks like on its exterior gives an excellent idea of its value.
Reality: There are a multitude of different variables that show the value of a home; these factors include area, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be found just by viewing the house from the outside.
Myth: Since you're the one paying for the appraisal report when applying for the loan to buy or refinance real estate, you own the ordered appraisal.
Reality: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report.
Consumers must be given a version of the document upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the needs of their lending agency.
Reality: It is very important for home buyers to check over a copy of their appraisal report so that they can verify the accuracy of the document, in case they need to question its veracity. 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 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: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending agency.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a multitude 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: An appraisal is no different than a home inspection report.
Reality: An appraisal does not serve the same purpose as an inspection.
The task of the appraiser is to find an opinion of value in the appraisal process and through writing the report.
The purpose of a home inspector is to assess the condition of the home and its main components, then compose a report on their conclusions.
