Myth: The value that is ascertained by the appraiser must be equivalent to the market value.
Reality: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always.
Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are exact examples of why the price can vary.
Myth: The buyer or the seller will have an influence in the value of the home depending upon for whom the appraiser is working.
Reality: There is no vested interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is ordered.
Myth: The replacement cost of the property should be on par with the market value.
Reality: The way market value is derived is based on what a home buyer would likely pay a willing seller for a home without being under duress from any outside group to buy or sell.
Replacement value is the dollar amount needed to rebuild a house in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the value of a house.
Reality: Appraisers make a full analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: In a powerful economy - when the prices of properties in a given county are reported to be rising by a certain percentage - the values of individual properties in the area can be expected to increase by that same percentage.
Reality: All appreciation of value is on a case-by-case basis, determined by information on relevant considerations and the data of comparable homes.
It makes no difference whether the economy is excellent or on the decline.
Myth: You can generally tell what a home is worth simply by looking at the outside.
Reality: There are a number of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from simply looking at the property from the exterior.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance real estate, they legally own their appraisal.
Reality: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the appraisal.
However, consumers must be given a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the requirements of their lending agency.
Reality: Only when home buyers look through a copy of their report can they double-check 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 appraisal report 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender-based sales transaction.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a multitude 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: You don't need to get an appraisal if you order a home inspection.
Reality: Appraisal reports are definitely not the same as a home inspection.
The function of an appraisal is to find an opinion of market value during the appraisal process and the production of the appraisal.
House inspectors will compose a report that will express the condition of the house and its major components and possible damage.
