Myth: Market value should be similar to the assessed value of the property.
Reality: While most states uphold the concept that assessed value equates estimated market value, this usually is not the case.
Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are perfect examples of why there might be a differential in price.
Myth: The value of a home will be different depending upon if the appraisal is conducted for the buyer or the seller.
Reality: The opinion of value of the home does not affect the payment of the appraiser; due to this, the appraiser has no personal interest in the opinion of value of the house. Obviously, he will complete his task with impartiality and objectivity regardless of for whom the appraisal is created.
Myth: Any time market value is calculated, it should match the replacement cost of the property.
Reality: The way market value is found is based on what a home buyer would likely pay a willing seller for a property without being under influence from any external group to purchase or sell.
If the house were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: There are specific methods that real estate appraisers use to show the cost of a house, like the price per square foot.
Reality: Appraisers complete a detailed analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: In a powerful economy - when the sales prices of properties in a given neighborhood are found to be appreciating by a particular percentage - the values of individual houses in the area can be expected to increase by that same percentage.
Reality: All appreciation of value is on a one-on-one basis, concluded by information on relevant elements and the data of comparable houses.
It makes no difference if the economy is good or bad.
Myth: The house's exterior is determinate of the expected price of the house; there is no need to do an interior inspection.
Reality: There are a multitude of different variables that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends.
There's no possible way to get all of this data from just inspecting the house from the exterior.
Myth: Because the consumer is the one who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Reality: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the appraisal.
Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be provided with one by their lending company.
Myth: There's no point for consumers to even worry about what the report contains so long as their lender is satisfied.
Reality: A home buyer should definitely look through their appraisal report; there might be some questions or some concerns about the accuracy of the appraisal that should be addressed. 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, as it contains a great deal of information - 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 proximity.
Myth: The only reason someone would order an appraisal is if a home needs its value estimated in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection report.
Reality: A home inspection report has a completely different purpose than an appraisal.
The task of the appraiser is to form an opinion of value in the appraisal process and through producing the report.
House inspectors will write a report that will explain the condition of the home and its major components and possible damage.
