Myth: The value that is assessed by the appraiser should be the same as the market value.
Reality: While most states back the suggestion that assessed value is equal to estimated market value, this commonly is not the case.
Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an extended period of time.
Myth: The buyer or the seller often will have an influence in the value of the home depending upon for whom the appraiser is working.
Reality: There is no vested interest on the part of the appraiser in the result of the appraisal report, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is written.
Myth: Any time market value is determined, it should be the same as the replacement cost of the property.
Reality: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain house, with neither being under duress to buy or sell.
The dollar amount needed to reconstruct a property is what shows the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the value of a home.
Reality: Appraisers complete a detailed 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 homes.
Myth: In a powerful economy - when the sales prices of homes in a given county are reported to be increasing by a particular percentage - the prices of individual houses in the area can be expected to increase by that same percentage.
Reality: Any value an appraiser derives in regards to a specific property is always personalized, based on certain factors pulled from the data of comparable homes and other considerations within the house itself.
It doesn't matter if the economy is on the rise or declining.
Myth: You can usually see what a property is worth simply by looking at the exterior.
Reality: To conclude a solid value beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from just looking at the property from the outside.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance their house, they legally own their appraisal report.
Reality: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal.
Due the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with it by their lending company.
Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the requirements of their lender.
Reality: A home buyer should definitely inspect their document; there may be some questions or some concerns with the accuracy of the analysis 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 an appraisal report that should 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a house during a sales transaction involving a lending company.
Reality: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is the same as a home inspection report.
Reality: An appraisal does not fulfill the same purpose as an inspection report.
An appraiser concludes on an opinion of value in the appraisal process and resulting report.
The task of a home inspector is to find the condition of the property and its main components, then produce a report on their inspection.
