Myth: The value that is assessed by the appraiser will be exactly the same as the market value.
Reality: While most states uphold the idea that assessed value is equal to estimated market value, this commonly is not the case.
Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are prime examples of why the price can vary.
Myth: The appraised value of a property will vary depending upon if the appraisal is produced for the buyer or the seller.
Reality: The appraiser has no personal interest in the result of the appraisal and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should equate to replacement cost.
Reality: Market value is arrived at through what a willing buyer would likely pay a willing seller for a particular house, with neither being under undue influence to buy or sell.
Replacement cost is the dollar amount required to rebuild a property in-kind.
Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the value of a house.
Reality: There are many numerous processes that an appraiser will use to make an in-depth investigation of every factor pertaining to the home, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable houses.
Myth: As houses increase in value by a specific percentage - in a robust economic state - the homes within the same neighborhood are expected to appreciate by the same amount.
Reality: All appreciation of value is on a one-on-one basis, found by data on relevant conditions and the data of comparable homes.
It makes no difference if the economy is powerful or poor.
Myth: The home's exterior is determinate of the actual value of the property; there is no need to do an interior inspection.
Reality: To conclude a solid value beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends.
An outside-only inspection definitely can't provide all of the information needed.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to buy or refinance your house, you own the provided appraisal report.
Reality: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal.
By the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with it by their lending agency.
Myth: Home buyers need not care about what is in their document so long as it satisfies the necessities of their lending institution.
Reality: It is almost imperative for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can double as a record for the future, as it contains a great deal of 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lender.
Reality: Appraisers can have many different qualifications and designations which allow them to perform 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: There's no need to get an appraisal if you have had a home inspection.
Reality: An appraisal report does not serve the same purpose as an inspection report.
The job of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report.
A home inspector assesses the condition of the home and its major components and reports their findings.
