Myth: The value that is ascertained by the appraiser must be the same as the 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.
Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an prolonged time.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the value of the property will vary.
Reality: The appraiser has no personal interest in the result of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is determined, it should be the same as the replacement cost of the home.
Reality: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a property without being under influence from any external party to purchase or sell.
Replacement cost is the dollar amount required to reconstruct a property in-kind.
Myth: There are certain ways that real estate appraisers use to determine the opinion of value of a house, such as the price per square foot.
Reality: There are many differing processes that an appraiser will use to make a comprehensive analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable houses.
Myth: In a robust economy - when the values of homes in a given neighborhood are found to be appreciating by a particular percentage - the values of individual properties in the proximity can be expected to rise by that same percentage.
Reality: Any value an appraiser reports concerning a specific home is always individualized, based on certain factors derived from the information of comparable properties and other considerations within the house itself.
It doesn't matter if the economy is on the rise or declining.
Myth: The home's outside is determinate of the expected price of the home; it is unnecessary to do an interior inspection.
Reality: Home value is concluded by a multitude of variables, including location, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be derived simply by examining the house from the outside.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance real estate, they own their appraisal.
Reality: Legally, the document is owned by the lending agency unless the lender releases their interest in the appraisal.
Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be given one by their lender.
Myth: It doesn't concern consumers what's in the report so long as it meets the requirements of their lender.
Reality: It is almost imperative for consumers to peruse a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can serve as a record for the future, since it contains a great deal of information - including, but certainly 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: Appraisals are ordered only to assess building values in house sales involving mortgage-lending transactions.
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: A house inspection serves the same purpose as an appraisal.
Reality: Appraisal reports are nothing like a home inspection report.
The function of an appraisal is to find an opinion of market value during the appraisal process and the production of the appraisal.
A home inspector determines the condition of the home and its main components and reports these findings.
