Myth: Market value has to be equivocal to the assessed value of the property.
Reality: While most states back the concept that assessed value is equal to estimated market value, this usually is not the case.
Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby houses are exact examples of why there might be a differential in price.
Myth: The opinion of value of a home will be different depending upon whether the appraisal is provided for the buyer or the seller.
Reality: The appraiser has no vested interest in the outcome of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is determined, it should match the replacement cost of the property.
Reality: The way market value is found is based on what a home buyer would likely pay a willing seller for a home without being under duress from any outside group to purchase or sell.
The replacement cost is the dollar amount necessary to reconstruct a home in-kind.
Myth: Certain methods, such as the price per square foot of the property, are the methods appraisers use to arrive at the value of a property.
Reality: Appraisers make a full analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: When the economy is robust and the sales prices of homes 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: Any value an appraiser reports in regards to a specific house is always personalized, based on certain factors pulled from the data of comparable homes and other considerations within the house itself.
It makes no difference if the economy is strong or bad.
Myth: Just examining what the property looks like on its exterior gives an excellent idea of its value.
Reality: To find a solid value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and market trends.
Obviously, none of these factors can be found simply by looking at the house from the outside.
Myth: Since you're the one providing the money for the appraisal report when applying for the loan to purchase or refinance real estate, you own the produced appraisal report.
Reality: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal.
Home buyers have to be provided with a copy of the document upon written request due to the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their report so long as it meets the necessities of their lending group.
Reality: It is very important for consumers to look at a copy of their appraisal report 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 an incredible amount of information contained in an appraisal report 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a property during a sales transaction involving a lender.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no need to get an appraisal if you have had a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection report.
The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report.
A home inspector determines the condition of the property and its major components and reports these findings.
