Myth: The value that is ascertained by the appraiser will be the same as the market value.
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.
Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The value of a home will differ depending upon whether the appraisal is produced for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement value of the house should be on par with the market value.
Reality: The way market value is found is based on what a home buyer would likely pay a willing seller for a property without being under influence from any outside group to purchase or sell.
If the house were reconstructed, the dollar amount needed to do so would make up the replacement cost.
Myth: Specific formulae, like the price per square foot, are the methods appraisers use to determine the value of a property.
Reality: There are many numerous calculations that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable properties.
Myth: As properties increase in value by a certain percentage - in a robust economic state - the properties within the same neighborhood are figured to increase by the same amount.
Reality: Any value an appraiser derives in regards to a certain home is always personalized, based on certain factors found from the information of comparable homes and other considerations within the home itself.
It doesn't matter if the economy is doing well or declining.
Myth: Just examining what the house looks like on its exterior gives an excellent idea of its value.
Reality: To determine a definite value beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends.
There's no real way to get all of this data from simply looking at the property from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance real estate, they own their appraisal report.
Reality: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that purchased the appraisal.
Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be provided with it by their lender.
Myth: There's no point for consumers to even concern themselves with what the report contains so long as their lender is fine with the contents therein.
Reality: A home buyer should definitely read through their appraisal; there will probably be some questions or some worries about the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of data stored in a report that will probably be useful to the consumer 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: Appraisals are ordered only to estimate real estate property values in home sales involving mortgage-lending deals.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a lot of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You don't have to get an appraisal if you get a home inspection.
Reality: An appraisal report does not serve the same purpose as an inspection.
An appraiser finds an opinion of value in the appraisal process and resulting document.
House inspectors will compose a report that will express the condition of the house and its major components and possible damage.
