Myth: The value that is assessed by the appraiser is required to be equivalent to the market value.
Reality: While most states back the concept that assessed value is equal to estimated market value, this often is not the case.
Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.
Myth: The opinion of value of a property will vary depending upon whether the appraisal is ordered for the buyer or the seller.
Reality: The appraiser has no personal interest in the result of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is determined, it should be the same as the replacement cost of the house.
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 external group to buy or sell.
If the house were rebuilt, the dollar amount necessary to do so would set the replacement cost.
Myth: There are specific methods that appraisers use to show the opinion of value of a house, such as the price per square foot.
Reality: Appraisers complete a comprehensive analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: In a powerful economy - when the sales prices of properties in a given county are reported to be rising by a certain percentage - the prices of individual homes in the area can be expected to increase by that same percentage.
Reality: Any value an appraiser derives in regards to a particular property is always personalized, based on certain factors derived from the information of comparable houses and other specifications within the house itself.
It makes no difference if the economy is robust or terrible.
Myth: The home's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.
Reality: There are a number of different factors that show the value of a house; these factors include location, condition, improvements, amenities, and market trends.
An outside-only inspection certainly can't provide all of the information needed.
Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your home, you own the provided appraisal report.
Reality: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal.
However, home buyers have to be given a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal report so long as it meets the requirements of their lending agency.
Reality: A home buyer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is an incredible amount of data contained in an appraisal that will probably 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 region.
Myth: The only reason someone would hire an appraiser is if a property needs its value assessed in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: An appraisal does not serve the same purpose as an inspection report.
The task of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report.
The point of a home inspector is to assess the condition of the house and its major components, then provide a report on these conclusions.
