Myth: Assessed value will always be equal to 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.
Usually when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the area have not been reassessed for quite a while, it may vary widely.
Myth: The value of a home will change depending upon if the appraisal is provided for the buyer or the seller.
Reality: The price of the home does not affect the salary of the appraiser; as a result, the appraiser has no pressured interest in the value of the home. This means that he will provide services with impartiality and objectivity regardless of for whom the appraisal is provided.
Myth: Market value should equate to replacement cost.
Reality: The way market value is derived is based on what a home buyer would likely pay a willing seller for a home without being under influence from any outside party to purchase or sell.
If the home were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: Certain methods, like the price per square foot of the property, are the ways appraisers use to arrive at the value of a property.
Reality: There are many numerous processes that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable houses.
Myth: As houses increase in value by a specific percentage - in a strong economy - the properties within the same neighborhood are figured to appreciate by the same amount.
Reality: Any value an appraiser derives concerning a specific property is always personalized, based on certain factors pulled from the data of comparable houses and other considerations within the house itself.
It doesn't matter if the economy is doing well or declining.
Myth: You can usually see what a house is worth simply by looking at the exterior.
Reality: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends.
An exterior inspection definitely can't provide all of the information necessary.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance real estate, they own their appraisal report.
Reality: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the report.
However, consumers have to be given a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it meets the necessities of their lender.
Reality: It is a very good idea for consumers to check over a copy of their report so that they can double-check the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can serve as a record for the future, as it contains an exorbitant amount of data - 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending agency.
Reality: Based upon their qualifications and designations, appraisers can and do perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: A home inspection report serves a completely different purpose than an appraisal report.
The point of an appraisal is to form an opinion of market value during the appraisal process and the completion of the appraisal report.
House inspectors will produce a report that will determine the condition of the house and its major components and possible damage.