Myth: Market value will always be similar to the assessed value of the property.
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.
Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an prolonged time.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the opinion of value of the home will vary.
Reality: The appraised value of the house does not affect the salary of the appraiser; as a result, the appraiser has no pressured interest in the value of the house. This means that he will complete his task with impartiality and independence regardless of for whom the appraisal is provided.
Myth: The replacement value of the home will be on par with the market value.
Reality: Without any pressure from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house.
The dollar amount required to rebuild a house is what forms the replacement cost.
Myth: There are certain ways that real estate appraisers use to show the opinion of value of a property, like the price per square foot.
Reality: There are many varied calculations that an appraiser will use to make a full analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable homes.
Myth: As homes appreciate by a specific percentage - in a robust economy - the houses nearby are figured to appreciate by the same amount.
Reality: Any value an appraiser reports concerning a particular house is always personalized, based on certain factors pulled from the information of comparable homes and other considerations within the house itself.
It doesn't matter if the economy is doing well or declining.
Myth: Just looking at what the property looks like on its exterior gives a good idea of its value.
Reality: There are a number of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from just viewing the house from the outside.
Myth: Since you're the one funding for the appraisal report when applying for the loan to purchase or refinance real estate, you own the provided appraisal.
Reality: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the document.
However, home buyers have to be given a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even care about what the appraisal contains so long as their lender is fine with the contents therein.
Reality: A consumer should definitely read through their appraisal report; there may be some questions or some concerns with the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes an excellent record for future reference, comprised of helpful and often-revealing data - including, but 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: Appraisers are hired only to assess home values in home sales involving mortgage-lending transactions.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a series 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: An appraisal is the same as a home inspection report.
Reality: A home inspection serves a completely different purpose than an appraisal report.
The job of the appraiser is to come to an opinion of value in the appraisal process and through creating the report.
House inspectors will compose a report that will show the condition of the home and its major components and possible damage.
