Myth: The value that is ascertained by the appraiser should be the same as the market value.
Reality: This usually isn't true; 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 is unaware of the improvements, or when houses in the area have not been reassessed for an extended period of time.
Myth: The opinion of value of a house will vary depending upon if the appraisal is provided for the buyer or the seller.
Reality: The opinion of value of the property does not affect the pay of the appraiser; due to this, the appraiser has no vested interest in the opinion of value of the property. Obviously, he will render job with impartiality and objectivity regardless of for whom the appraisal is created.
Myth: Any time market value is established, it should equal the replacement cost of the property.
Reality: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. If the property were reconstructed, the dollar amount necessary to do so would form the replacement cost.
Myth: Certain formulae, like the price per square foot, are the ways appraisers use to arrive at the value of a house.
Reality: There are many different ways that an appraiser will use to make a comprehensive analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable houses.
Myth: As houses increase in value by a certain percentage - in a strong economic state - the homes within the same neighborhood are expected to appreciate by the same amount.
Reality: Any value an appraiser reports in regards to a particular house is always personalized, based on certain factors found from the information of comparable houses and other specifications within the property itself. It makes no difference if the economy is strong or poor.
Myth: The property's exterior is determinate of the actual value of the house; there is no need to do an interior appraisal.
Reality: To conclude a genuine value beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found just by viewing the home from the outside.
Myth: Since the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Reality: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report. By the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be given one by their lending agency.
Myth: Home buyers need not worry about what is in their appraisal report so long as it exceeds the requirements of their lending group.
Reality: A consumer should definitely read through their report; there might be some questions or some worries with the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in a report that could 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 region.
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 agency.
Reality: Depending upon their qualifications and designations, appraisers can and will perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Reality: Appraisal reports are definitely not the same as a home inspection. The reason behind an appraisal is to form an opinion of market value during the appraisal process and the production of the report. House inspectors will compose a report that will show the condition of the home and its major components and possible damage.
