Myth: Market value will always be equivocal to the assessed value of the property.
Reality: While most states support the suggestion that assessed value is equal to estimated market value, this usually is not the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are excellent examples of why the price can vary.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the value of the house will vary.
Reality: There is no personal interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, regardless of for whom the appraisal is conducted.
Myth: Market value should mirror replacement cost.
Reality: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. The dollar amount needed to reconstruct a property is what shows the replacement cost.
Myth: There are certain methods that real estate appraisers use to find the opinion of value of a property, such as the price per square foot.
Reality: There are many differing processes that an appraiser will use to make an in-depth analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the sales prices of recently sold comparable homes.
Myth: When the economy is robust and the sales prices of houses are reported to be rising by a certain percentage, the other properties in the neighborhood can be expected to increase based on that same percentage.
Reality: Any value an appraiser reports in regards to a certain home is always individualized, based on certain factors found from the information of comparable properties and other specifications within the home itself. This is true in excellent economic times as well as poor.
Myth: The house's outside is determinate of the expected price of the property; it is unnecessary to do an interior appraisal.
Reality: There are a multitude of different variables that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. An external inspection definitely can't provide all of the data necessary.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their property, they legally own their appraisal report.
Reality: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the report. Consumers must be provided with a copy of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even worry about what the report contains so long as their lender is fine with the contents therein.
Reality: A home buyer should definitely read through their appraisal; there could be some questions or some concerns with the accuracy of the appraisal that must 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 will probably 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending agency.
Reality: Based upon their qualifications and designations, appraisers can and will provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection report.
Reality: A home inspection report has a completely different purpose than an appraisal report. The job of the appraiser is to find an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the building and its main components and reports their findings.