Myth: Market value will always be similar to the assessed value of the property.
Reality: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always.
Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are perfect examples of why there might be a differential in price.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the value of the property will vary.
Reality: There is no personal interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is ordered.
Myth: The replacement cost of the home will be on par with the market value.
Reality: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a property without being under pressure from any outside group to purchase or sell.
The dollar amount necessary to rebuild a property is what shows the replacement cost.
Myth: Certain methods, such as the price per square foot, are the ways appraisers use to ascertain the value of a house.
Reality: There are many varied processes that an appraiser will use to make a detailed investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable homes.
Myth: In a strong economy - when the values of homes in a given county are reported to be appreciating by a certain percentage - the values of individual houses in the vicinity can be expected to rise by that same percentage.
Reality: Any value an appraiser derives concerning a specific home is always individualized, based on certain factors pulled from the data of comparable properties and other specifications within the house itself.
It doesn't matter if the economy is doing well or declining.
Myth: The house's exterior is determinate of the expected price of the house; it is unnecessary to do an interior inspection.
Reality: There are a number of different variables that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends.
An external inspection definitely can't provide all of the data needed.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance real estate, you own the ordered appraisal.
Reality: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal.
Home buyers have to be given a version of the document upon written request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal document so long as it meets the requirements of their lending company.
Reality: It is almost imperative for consumers to go through a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes a near perfect 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 proximity.
Myth: The only reason someone would order an appraisal is if a home needs its value estimated in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and often do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection report.
An appraiser finds an opinion of value in the appraisal process and resulting appraisal.
House inspectors will create a report that will explain the condition of the property and its major components and possible damage.
