Myth: Assessed value should always equate market value.
Reality: While most states support the idea that assessed value is equal to estimated market value, this commonly is not the case.
Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The buyer or the seller will have leverage in the cost of the home depending upon for whom the appraiser is working.
Reality: There is no personal interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is ordered.
Myth: Market value will mirror replacement cost.
Reality: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property.
The dollar amount demanded to rebuild a home is what forms the replacement cost.
Myth: There are specific methods that appraisers use to show the value of a house, such as the price per square foot.
Reality: There are many numerous processes that an appraiser will use to make an in-depth investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the values of recently sold comparable properties.
Myth: In a robust economy - when the values of houses in a given neighborhood are found to be increasing by a particular 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, concluded by information on relevant elements and the data of comparable houses.
It makes no difference whether the economy is excellent or terrible.
Myth: The home's exterior is determinate of the actual value of the property; there is no need to do an interior inspection.
Reality: There are a multitude of different variables that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends.
As you can see, none of these factors can be found just by examining the property from the exterior.
Myth: Considering that the consumer is the person who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Reality: Unless a lender releases its interest in the report, it is legally owned by the lending company that ordered the appraisal.
However, consumers have to be given a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it meets the necessities of their lender.
Reality: Only when home buyers look through 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.
There is an incredible amount of data stored in an appraisal that can be useful to the consumer 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a property during a sales transaction involving a lender.
Reality: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is the same as a home inspection.
Reality: A home inspection has a completely different purpose than an appraisal.
The task of the appraiser is to come to an opinion of value in the appraisal process and through producing the report.
The job of a home inspector is to determine the condition of the house and its major components, then provide a report on their findings.