Myth: Assessed value should always be similar to market value.
Reality: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always.
Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are exact examples of why this occurs.
Myth: The value of a property will differ depending upon if the appraisal is conducted for the buyer or the seller.
Reality: The opinion of value of the property does not affect the salary of the appraiser; as a result, the appraiser has no preconceived interest in the value of the property. This means that he will conduct services with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: Market value should mirror replacement cost.
Reality: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house.
If the home were reconstructed, the dollar amount necessary to do so would set the replacement cost.
Myth: There are specific methods that real estate appraisers use to determine the opinion of value of a property, such as the price per square foot.
Reality: Appraisers complete an exhaustive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: As properties increase in value by a specific percentage - in a strong economy - the homes within the same neighborhood are expected to increase by the same amount.
Reality: Any value an appraiser reports in regards to a specific home is always individualized, based on certain factors pulled from the data of comparable homes and other considerations within the house itself.
It makes no difference whether the economy is strong or poor.
Myth: Just examining what the house looks like on its exterior gives an excellent idea of its value.
Reality: There are a multitude of different factors that show the value of a home; these factors include area, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from simply examining the home from the exterior.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their home, they legally own their appraisal report.
Reality: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal.
Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be provided with one by their lending company.
Myth: There's no need for consumers to even concern themselves with what the appraisal report contains so long as their lending company is satisfied.
Reality: A consumer should definitely read through their appraisal; 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.
An appraisal can double as a record for the future, containing a great deal of information - including, but not limited to 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 assessment of the value of a home during a sales transaction involving a lending agency.
Reality: Based upon their qualifications and designations, appraisers can and do perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Reality: An appraisal report does not fulfill the same purpose as an inspection report.
The task of the appraiser is to find an opinion of value in the appraisal process and through creating the report.
The task of a home inspector is to find the condition of the home and its major components, then compose a report on these conclusions.