Myth: The value that is assessed by the appraiser will be equivalent to the market value.
Reality: While most states support the concept that assessed value is equal to estimated market value, this usually is not the case.
Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an prolonged time.
Myth: The buyer or the seller may have an influence in the cost of the property depending upon for whom the appraiser is working.
Reality: The appraised value of the home does not affect the payment of the appraiser; as such, the appraiser has no personal interest in the value of the house. Obviously, he will provide business with impartiality and objectivity regardless of for whom the appraisal is created.
Myth: Any time market value is established, it should be the same as the replacement cost of the property.
Reality: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under duress to buy or sell.
If the home were rebuilt, the dollar amount necessary to do so would make up the replacement cost.
Myth: Specific methods, like the price per square foot, are the ways appraisers use to arrive at the value of a property.
Reality: An appraisal report is a collection of data concluded from the property's size, location, proximity to undesirable facilities, the condition of the property and the values of recent comparable sales. You can depend on Associate Appraisers of America's appraisers to be professional in assessing this data.
Myth: In a strong economy - when the sales prices of homes in a given region are reported to be increasing by a certain percentage - the values of individual homes in the vicinity can be expected to increase by that same percentage.
Reality: All appreciation of value is on an individual basis, found by data on relevant elements and the data of comparable houses.
This is true in robust economic times as well as bad.
Myth: You can generally tell what a house is worth simply by looking at the exterior.
Reality: To determine a concrete value beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be found simply by looking at the home from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance real estate, you own the provided appraisal.
Reality: The appraisal is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document.
Consumers must be provided with a version of the report upon written request because of the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even concern themselves with what the appraisal contains so long as their lending agency is satisfied.
Reality: Only when home buyers check out a copy of their appraisal 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 double as a record for the future, containing 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 hire an appraiser unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending company.
Reality: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not fulfill the same purpose as an inspection report.
The reason behind an appraisal is to find an opinion of market value during the appraisal process and the completion of the appraisal.
The purpose of a home inspector is to approximate the condition of the house and its main components, then provide a report on their inspection.
