Myth: The value that is ascertained by the appraiser is required to be exactly the same as the 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.
Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are perfect examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the house will vary.
Reality: There is no real interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is conducted.
Myth: Market value will mirror replacement cost.
Reality: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home.
If the property were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: There are specific ways that appraisers use to determine the value of a house, like the price per square foot.
Reality: There are many numerous calculations that an appraiser will use to make an in-depth investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable properties.
Myth: When the economy is robust and the sales prices of properties are found to be rising 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, found by information on relevant conditions and the data of comparable homes.
It doesn't matter if the economy is on the rise or declining.
Myth: The house's exterior is determinate of the actual value of the property; it is unnecessary to do an interior inspection.
Reality: House value is determined by a number of factors, including location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this data from simply inspecting the home from the exterior.
Myth: Since you're the one paying for the appraisal report when applying for the loan to buy or refinance your home, you own the ordered appraisal report.
Reality: The document is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document.
Under the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be given one by their lender.
Myth: Home buyers need not be concerned with what is in their report so long as it satisfies the necessities of their lending company.
Reality: It is very important for home buyers 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 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender-based sales transaction.
Reality: Appraisers can have many different qualifications and designations which allow them to perform a variety of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: A home inspection serves a completely different purpose than an appraisal.
The appraiser forms an opinion of value in the appraisal process and resulting document.
A home inspector determines the condition of the property and its main components and reports their findings.
