Myth: Market value will always be the same as the assessed value of the property.
Reality: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always.
Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are exact examples of why this occurs.
Myth: The buyer or the seller can have impact in the value of the home depending upon for whom the appraiser is working.
Reality: The appraised value of the home does not affect the salary of the appraiser; due to this, the appraiser has no pressured interest in the opinion of value of the home. What this means is he will complete his services with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: The replacement cost of the property will be on par with the market value.
Reality: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular home.
If the property were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: Certain methods, like the price per square foot, are what appraisers use to arrive at the value of a home.
Reality: Appraisers make a full analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: In a strong economy - when the sales prices of properties in a given area are found to be rising by a certain percentage - the prices of individual houses in the vicinity can be expected to appreciate by that same percentage.
Reality: All appreciation of value is on an individual basis, determined by information on relevant elements and the data of comparable houses.
It makes no difference whether the economy is strong or bad.
Myth: You can often see what a house is worth simply by looking at the outside.
Reality: Home value is concluded by a number of variables, including location, condition, improvements, amenities, and market trends.
Obviously, none of these variables can be found just by examining the home from the outside.
Myth: Since you're the one funding for the appraisal when applying for the loan to purchase or refinance your house, you own the provided appraisal.
Reality: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report.
However, consumers must be given a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their document so long as it exceeds the necessities of their lending institution.
Reality: A home buyer should definitely inspect their report; there may be some questions or some worries with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of data contained in an appraisal that can 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 proximity.
Myth: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender sales transaction.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a lot of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not fulfill the same purpose as an inspection.
The purpose of the appraiser is to come to an opinion of value in the appraisal process and through writing the report.
House inspectors will produce a report that will explain the condition of the home and its major components and possible damage.