Myth: Assessed value should always be the same as 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.
Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged period.
Myth: The buyer or the seller can have impact in the value of the property depending upon for whom the appraiser is working.
Reality: The opinion of value of the property does not affect the pay of the appraiser; due to this, the appraiser has no pressured interest in the opinion of value of the property. What this means is he will render business with impartiality and objectivity regardless of for whom the appraisal is created.
Myth: Market value should mirror replacement cost.
Reality: Market value is found by what a willing buyer would likely pay a willing seller for a certain house, with neither being under duress to buy or sell.
The replacement cost is the dollar amount necessary to reconstruct a property in-kind.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the value of a house.
Reality: There are many different calculations that an appraiser will use to make a comprehensive analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable houses.
Myth: As properties appreciate by a certain percentage - in a strong economic state - the houses around the appreciating properties are figured to appreciate by the same amount.
Reality: All appreciation of value is on an individual basis, concluded by data on relevant considerations and the data of comparable homes.
This is true in excellent economic times as well as poor.
Myth: The house's exterior is determinate of the expected price of the property; it is unnecessary to do an interior appraisal.
Reality: Home value is determined by a multitude of factors, including location, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be derived simply by viewing the home from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to purchase or refinance your house, you own the ordered appraisal report.
Reality: Legally, the report is owned by the lending company unless the lender releases their interest in the appraisal.
Consumers have to be supplied with a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal report so long as it meets the needs of their lending company.
Reality: It is a very good idea for home buyers to check over a copy of their appraisal so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the report makes a valuable record for future reference, comprised of useful and often-revealing information - 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending institution.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: A home inspection report serves a completely different purpose than an appraisal report.
An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal.
The purpose of a home inspector is to assess the condition of the house and its main components, then provide a report on their findings.