Myth: Assessed value will always be the same as market value.
Reality: While most states back the idea that assessed value is equal to estimated market value, this often is not the case.
Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are prime examples of why the price can vary.
Myth: Depending on if the appraisal is done for the buyer or the seller, the value of the home will vary.
Reality: The price of the home does not affect the payment of the appraiser; as a result, the appraiser has no pressured interest in the opinion of value of the property. Obviously, he will provide services with impartiality and objectivity regardless of for whom the appraisal is created.
Myth: Any time market value is determined, it should equal the replacement cost of the house.
Reality: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a property without being under duress 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 certain methods that appraisers use to show the cost of a property, like the price per square foot.
Reality: Appraisers make a comprehensive analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: As houses increase in value by a specific percentage - in a strong economy - the properties around the appreciating properties are expected to appreciate by the same amount.
Reality: The appreciation of a certain house must be determined on an individualized basis, factoring in data on comparable houses and other relevant elements.
This is true in robust economic times as well as poor.
Myth: You can generally see what a house is worth simply by looking at the exterior.
Reality: There are a number of different variables that show the value of a house; these factors include location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this data from simply viewing the home from the outside.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance real estate, they own their appraisal report.
Reality: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal.
Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be given one by their lending agency.
Myth: Home buyers need not be concerned with what is in their appraisal document so long as it meets the requirements of their lending agency.
Reality: It is a very good idea for home buyers to go through a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of information contained in an appraisal that should be useful to the home buyer 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 vicinity.
Myth: The only reason someone would order an appraisal is if a property needs its value assessed in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and often do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you have had a home inspection.
Reality: A home inspection has a completely different purpose than an appraisal.
The point of an appraisal report is to find an opinion of market value during the appraisal process and the production of the appraisal report.
A home inspector assesses the condition of the building and its main components and reports these findings.
