Myth: The value that is assessed by the appraiser must be equivalent to the market value.
Reality: It is probable that Indiana, like most states, validates the suggestion that the assessed value is no different from the market value; however, this is not always true.
Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an extended time.
Myth: The buyer or the seller sometimes may have leverage in the value of the property depending upon for whom the appraiser is working.
Reality: The appraised value of the home does not affect the payment of the appraiser; due to this, the appraiser has no vested interest in the price of the house. This means that he will render job with impartiality and objectivity regardless of for whom the appraisal is provided.
Myth: Any time market value is established, it should be the same as the replacement cost of the property.
Reality: Market value is based on what a willing buyer would likely pay a willing seller for a specific house, with neither being under undue influence to buy or sell.
The dollar amount necessary to reconstruct a home is what forms the replacement cost.
Myth: Certain formulae, like the price per square foot, are the methods appraisers use to determine the value of a house.
Reality: Appraisers complete a detailed analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: When the economy is strong and the sales prices of properties are found to be rising by a certain percentage, the other homes in the proximity can be expected to appreciate based on that same percentage.
Reality: All increase of value is on a one-on-one basis, concluded by data on relevant elements and the data of comparable houses.
It makes no difference whether the economy is good or terrible.
Myth: You can commonly tell what a home is worth simply by looking at the exterior.
Reality: There are a multitude of different variables that determine property value; these factors include area, condition, improvements, amenities, and market trends.
As you can see, none of these things can be derived just by inspecting the property from the exterior.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their house, they legally own their appraisal.
Reality: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the report.
However, consumers must be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal report so long as it satisfies the necessities of their lending agency.
Reality: A consumer should definitely inspect their document; there could be some questions or some concerns about the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can double as a record for the future, as it contains an incredible amount of 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 proximity.
Myth: Appraisers are hired only to assess building values in house sales involving mortgage-lending deals.
Reality: Depending upon their qualifications and designations, appraisers can and often do perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal does not fulfill the same purpose as an inspection.
The task of the appraiser is to form an opinion of value in the appraisal process and through producing the report.
House inspectors will create a report that will determine the condition of the house and its major components and possible damage.
