Myth: The value that is assessed by the appraiser should be exactly the same as the market value.
Reality: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always.
Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the appraised value of the home will vary.
Reality: The opinion of value of the home does not affect the salary of the appraiser; because of this, the appraiser has no preconceived interest in the opinion of value of the property. Obviously, he will render job with impartiality and objectivity regardless of for whom the appraisal is created.
Myth: The replacement value of the home should be on par with the market value.
Reality: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home.
If the house were rebuilt, the dollar amount necessary to do so would make up the replacement cost.
Myth: There are specific ways that appraisers use to determine the value of a house, such as the price per square foot.
Reality: There are many differing formulae that an appraiser will use to make a full analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable properties.
Myth: When the economy is robust and the sales prices of houses are found to be rising by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.
Reality: Any value an appraiser derives in regards to a particular home is always individualized, based on certain factors derived from the information of comparable properties and other specifications within the home itself.
This is true in good economic times as well as bad.
Myth: Just seeing what the home looks like on its exterior gives a good idea of its value.
Reality: To determine a definite value beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and current market trends.
An external inspection certainly can't provide all of the information needed.
Myth: Considering that the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Reality: Legally, the appraisal is owned by the lender unless the lender releases their interest in the report.
Home buyers have to be provided with a copy of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lending company.
Reality: A home buyer should definitely look through their document; there might be some questions or some worries with the accuracy of the report that must be addressed. 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, filled with useful 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending institution.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Reality: An appraisal report does not serve the same purpose as an inspection report.
The point of an appraisal report is to arrive at an opinion of market value during the appraisal process and the completion of the appraisal.
House inspectors will produce a report that will show the condition of the house and its major components and possible damage.
