Myth: Assessed value generally will be equal to market value.
Reality: While most states back the idea that assessed value approximates estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an extended period of time.
Myth: Depending on if the appraisal is done for the buyer or the seller, the cost of the property will vary.
Reality: The opinion of value of the house does not affect the salary of the appraiser; due to this, the appraiser has no pressured interest in the worth of the property. This means that he will render business with impartiality and independence regardless of for whom the appraisal is created.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the property.
Reality: Without any pressure from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. The dollar amount necessary to reconstruct a house is what constitutes the replacement cost.
Myth: There are certain ways that real estate appraisers use to show the opinion of value of a house, such as the price per square foot.
Reality: There are many varied ways that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable houses.
Myth: As houses appreciate by a specific percentage - in a strong economic state - the houses in proximity are figured to increase by the same amount.
Reality: Any value at which an appraiser arrives in regards to a specific home is always individualized, based on certain factors pulled from the data of comparable homes and other considerations within the house itself. It doesn't matter if the economy is on the rise or declining.
Myth: You can commonly see what a house is worth simply by looking at the exterior.
Reality: To conclude an accurate value beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by looking at the house from the outside.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance real estate, they legally own their appraisal.
Reality: Legally, the document is owned by the lender unless the lender relinquishes their interest in the appraisal. Home buyers have to be provided with a version of the document through request due to the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it meets the needs of their lending agency.
Reality: Only when home buyers examine a copy of their appraisal can they verify its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, filled with helpful 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the worth of a house during a sales transaction involving a lender.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a lot of different services including - but 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 get a home inspection.
Reality: An appraisal report does not fulfill the same purpose as an inspection report. The reason behind an appraisal is to arrive at an opinion of fair market value during the appraisal process and the production of the report. A home inspector analyzes the condition of the home and its major components and reports their findings.