Myth: Assessed value generally will equate market value.
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 remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are excellent examples of why the price can vary.
Myth: The buyer or the seller may have impact in the cost of the house depending upon for whom the appraiser is working.
Reality: The appraiser has no vested interest in the outcome of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value should equal replacement cost.
Reality: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under influence from any outside party to buy or sell.
Replacement value is the dollar amount required to rebuild a property in-kind.
Myth: There are certain methods that real estate appraisers use to find the cost of a home, like the price per square foot.
Reality: There are many varied formulae that an appraiser will use to make an in-depth analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold 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 properties in the vicinity can be expected to appreciate based on that same percentage.
Reality: Any value an appraiser reports concerning a particular property is always individualized, based on certain factors found from the information of comparable houses and other considerations within the house itself.
This is true in robust economic times as well as poor.
Myth: Just seeing what the property looks like on the outside gives a good idea of its value.
Reality: There are a multitude of different factors that show the value of a house; these factors include location, condition, improvements, amenities, and market trends.
As you can see, none of these factors can be found simply by looking at the property from the outside.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance real estate, you own the provided appraisal.
Reality: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal.
Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be provided with one by their lending company.
Myth: Consumers need not be concerned with what is in their appraisal document so long as it meets the necessities of their lending group.
Reality: It is almost imperative for home buyers to read a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can serve as a record for the future, as it contains an exorbitant 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 area.
Myth: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender sales transaction.
Reality: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal does not serve the same purpose as an inspection report.
The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal.
The job of a home inspector is to find the condition of the property and its main components, then write a report on their inspection.
