Myth: The value that is ascertained by the appraiser will be the same as the market value.
Reality: While most states back the idea that assessed value is the same as 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 houses in the area have not been reassessed for an extended period of time.
Myth: The appraised value of a property will be different depending upon if the appraisal is produced for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, no matter of for whom the appraisal is ordered.
Myth: Any time market value is calculated, it should equal the replacement cost of the house.
Reality: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a property without being under duress from any external party to purchase or sell. The dollar amount needed to rebuild a home is what constitutes the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the value of a home.
Reality: An appraisal is an assertion of information concluded from the home's size, location, proximity to undesirable facilities, the condition of the property and the values of recent comparable sales. You can rely on Temple Realty's staff to be honest in assessing this data.
Myth: As homes appreciate by a certain percentage - in a strong economic state - the homes nearby are figured to increase by the same amount.
Reality: An increase in value of a certain home has to be determined on an individualized basis, factoring in data on comparable properties and other relevant specifications within the property itself. It doesn't matter if the economy is doing well or declining.
Myth: You can usually tell what a house is worth simply by looking at the outside.
Reality: Property value is determined by a number of variables, including area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just looking at the house from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their home, they own their appraisal report.
Reality: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the report. Consumers must be provided with a copy of the document through request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal so long as it exceeds the requirements of their lending institution.
Reality: A consumer should definitely look through their appraisal; there might be some questions or some concerns about the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an appraisal that can be useful to the consumer 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 order an appraisal is if a house needs its value assessed in a lender sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you have had a home inspection.
Reality: An appraisal report does not fulfill the same purpose as an inspection report. The task of the appraiser is to form an opinion of value in the appraisal process and through creating the report. The point of a home inspector is to approximate the condition of the home and its main components, then create a report on these findings.
