Myth: The value that is ascertained by the appraiser will be the same as the market value.
Reality: While most states uphold the suggestion that assessed value is the same as estimated market value, this usually is not the case.
Often when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the area have not been reassessed for a good length of time, it may vary widely.
Myth: The opinion of value of a property will vary depending upon whether the appraisal is produced for the buyer or the seller.
Reality: The opinion of value of the house does not affect the salary of the appraiser; as a result, the appraiser has no personal interest in the price of the property. Obviously, he will provide job with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Reality: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house.
The dollar amount necessary to rebuild a house is what forms the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the value of a house.
Reality: There are many different methods that an appraiser will use to make a full analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable houses.
Myth: As houses appreciate by a specific percentage - in a robust economy - the homes around the appreciating properties are figured to increase by the same amount.
Reality: All increase of value is on a case-by-case basis, found by information on relevant elements and the data of comparable homes.
It makes no difference if the economy is strong or bad.
Myth: You can often find what a property is worth simply by looking at the exterior.
Reality: House value is concluded by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be found just by viewing the house from the exterior.
Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance real estate, you own the ordered appraisal.
Reality: Unless a lender releases its vestment in the document, it is legally owned by the lending company that ordered the appraisal.
Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the document 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 satisfies the necessities of their lending institution.
Reality: A home buyer should definitely inspect their document; there could be some questions or some worries with the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a wealth of data contained in an appraisal report that will probably 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a house during a sales transaction involving a lender.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a multitude 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: An appraisal is the same as a home inspection report.
Reality: Appraisal reports have almost nothing in common with a home inspection report.
The reason behind an appraisal is to find an opinion of market value during the appraisal process and the production of the appraisal.
The point of a home inspector is to find the condition of the home and its main components, then create a report on these conclusions.