Myth: Market value will always be equivocal to the assessed value of the property.
Reality: While most states back the idea that assessed value is equal to estimated market value, this often is not the case.
Usually when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for quite some time, it may vary widely.
Myth: The value of a property will differ depending upon if the appraisal is conducted for the buyer or the seller.
Reality: There is no personal interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is created.
Myth: The replacement cost of the home will be on par with the market value.
Reality: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house.
The replacement cost is the dollar amount needed to reconstruct a property in-kind.
Myth: There are certain methods that appraisers use to show the cost of a house, such as the price per square foot.
Reality: Appraisers make a detailed analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: In a robust economy - when the prices of properties in a given county are found to be appreciating by a certain percentage - the prices of individual properties in the area can be expected to appreciate by that same percentage.
Reality: An increase in value of a specific home must be determined on an individualized basis, factoring in data on comparable properties and other relevant specifications within the property itself.
This is true in robust economic times as well as bad.
Myth: The property's exterior is determinate of the actual value of the house; it is unnecessary to do an interior appraisal.
Reality: Property value is concluded by a number of variables, including area, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be found just by looking at the home from the outside.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their house, they legally own their appraisal.
Reality: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal.
Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be provided with it by their lender.
Myth: Consumers need not worry about what is in their appraisal so long as it satisfies the needs of their lending agency.
Reality: Only when consumers examine a copy of their report can they verify its accuracy and know if they should ask questions. 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, containing an incredible amount 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 area.
Myth: The only reason someone would order an appraisal is if a house needs its value assessed in a lender sales transaction.
Reality: Ordering an appraisal can fulfill a variety of necessities 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: A house inspection serves the same purpose as an appraisal.
Reality: A home inspection serves a completely different purpose than an appraisal report.
The function of an appraisal report is to find an opinion of market value during the appraisal process and the production of the appraisal.
House inspectors will produce a report that will determine the condition of the home and its major components and possible damage.