Myth: Assessed value should be the same as 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.
Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended period of time.
Myth: The buyer or the seller can have an influence in the cost of the property depending upon for whom the appraiser is working.
Reality: The cost of the home does not affect the pay of the appraiser; as such, the appraiser has no vested interest in the value of the house. What this means is he will provide job with impartiality and independence regardless of for whom the appraisal is conducted.
Myth: Any time market value is established, it should match the replacement cost of the house.
Reality: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property.
If the house were reconstructed, the dollar amount required to do so would make up the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to figure out the value of a home.
Reality: There are many numerous calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable houses.
Myth: When the economy is on the rise and the sales prices of properties are reported to be increasing by a certain percentage, the other houses in the neighborhood can be expected to increase based on that same percentage.
Reality: All appreciation of value is on a case-by-case basis, determined by information on relevant conditions and the data of comparable houses.
This is true in robust economic times as well as poor.
Myth: You can often see what a home is worth simply by looking at the outside.
Reality: Home value is determined by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends.
An outside-only inspection certainly can't provide all of the data needed.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to buy or refinance your house, you own the ordered appraisal.
Reality: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal.
However, home buyers have to be given a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal document so long as it satisfies the requirements of their lending institution.
Reality: It is a very good idea for consumers to check over a copy of their appraisal so that they can double-check the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of data stored in an appraisal that should be useful to the home buyer in the future, such as 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: The only reason someone would hire an appraiser is if a property needs its value estimated in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and will provide a variety 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 have had a home inspection.
Reality: Appraisal reports are definitely not the same as a home inspection.
The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal.
House inspectors will produce a report that will express the condition of the house and its major components and possible damage.