Myth: The value that is ascertained by the appraiser should be the same as the market value.
Reality: While most states support the suggestion that assessed value is equal to estimated market value, this usually is not the case.
Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an extended period of time.
Myth: The value of a property will be different depending upon if the appraisal is provided for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is ordered.
Myth: The replacement cost of the house is always in line with the market value.
Reality: Without any pressure from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home.
If the house were reconstructed, the dollar amount needed to do so would make up the replacement cost.
Myth: There are certain ways that appraisers use to show the value of a home, like the price per square foot.
Reality: There are many numerous methods that an appraiser will use to make a comprehensive investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable houses.
Myth: As homes appreciate by a specific percentage - in a robust economic state - the homes around the appreciating properties are expected to appreciate by the same amount.
Reality: All appreciation of value is on a case-by-case basis, concluded by data on relevant conditions and the data of comparable properties.
It makes no difference whether the economy is excellent or poor.
Myth: The home's outside is determinate of the actual value of the home; there is no need to do an interior inspection.
Reality: Home value is determined by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends.
As you can see, none of these things can be found just by viewing the property from the outside.
Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your house, you own the ordered appraisal.
Reality: Legally, the appraisal report is owned by the lending agency unless the lender releases their interest in the appraisal.
Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given one by their lending company.
Myth: There's no reason for home buyers to even concern themselves with what the appraisal contains so long as their lending institution is fine with the contents therein.
Reality: A home buyer should definitely read through their document; there could be some questions or some worries with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes an invaluable record for future reference, containing useful and often-revealing data - including 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 property during a sales transaction involving a lending institution.
Reality: Based upon their qualifications and designations, appraisers can and will provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no need to get an appraisal if you get a home inspection.
Reality: An appraisal report does not serve the same purpose as an inspection report.
An appraiser decides upon an opinion of value in the appraisal process and resulting document.
The job of a home inspector is to approximate the condition of the home and its major components, then write a report on their findings.
