Myth: Market value needs to be the same as the assessed value of the property.
Reality: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always.
There are times when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary widely.
Myth: Depending on if the appraisal is written for the buyer or the seller, the value of the home will vary.
Reality: The appraiser has no personal interest in the result of the appraisal and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement value of the property will be on par with the market value.
Reality: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any outside group to purchase or sell.
The dollar amount required to reconstruct a home is what shows the replacement cost.
Myth: There are certain ways that real estate appraisers use to determine the value of a property, such as the price per square foot.
Reality: Appraisers complete a full analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: As properties appreciate by a specific percentage - in a strong economic state - the houses nearby are expected to appreciate by the same amount.
Reality: All increase of value is on a one-on-one basis, found by information on relevant conditions and the data of comparable properties.
This is true in robust economic times as well as poor.
Myth: You can usually tell what a property is worth simply by looking at the outside.
Reality: To determine a genuine value beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and current market trends.
An outside-only inspection certainly can't provide all of the data required.
Myth: Considering that the consumer is the person who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Reality: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report.
Consumers have to be provided with a copy of the document through request as per the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the needs of their lender.
Reality: Only when consumers read a copy of their appraisal report can they ensure its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
An 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending company.
Reality: Based upon their qualifications and designations, appraisers can and will perform a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you get a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection.
The function of an appraisal is to find an opinion of market value during the appraisal process and the completion of the appraisal report.
The purpose of a home inspector is to find the condition of the home and its major components, then write a report on their conclusions.
