Myth: The value that is assessed 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.
At times when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for quite a while, it may vary widely.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the value of the house will vary.
Reality: The price of the home does not affect the payment of the appraiser; because of this, the appraiser has no vested interest in the price of the home. Obviously, he will provide services with impartiality and independence regardless of for whom the appraisal is created.
Myth: The replacement cost of the property will be on par with the market value.
Reality: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home.
Replacement value is the dollar amount required to reconstruct a house in-kind.
Myth: There are certain methods that appraisers use to determine the value of a house, such as the price per square foot.
Reality: There are many differing ways that an appraiser will use to make a full 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 houses.
Myth: As houses appreciate by a specific percentage - in a robust economic state - the houses in proximity are figured to appreciate by the same amount.
Reality: All appreciation of value is on a one-on-one basis, found by data on relevant considerations and the data of comparable homes.
It doesn't matter if the economy is doing well or declining.
Myth: Just examining what the home looks like on the outside gives an excellent idea of its value.
Reality: To conclude a concrete value beyond all doubt, an appraiser must examine the house on a variety of factors based on area, condition, improvements, amenities, and current market trends.
An external inspection obviously can't provide all of the information necessary.
Myth: Considering that the consumer is the person who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Reality: Legally, the document is owned by the lender unless the lender releases their interest in the report.
However, consumers have to be supplied with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it meets the needs of their lending agency.
Reality: Only when consumers examine a copy of their appraisal report can they verify its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of information contained in a report that will probably be useful to the home buyer 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: Appraisers are hired only to estimate home values in home sales involving mortgage-lending deals.
Reality: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is the same as a home inspection.
Reality: Appraisal reports are definitely not the same as a home inspection.
The appraiser concludes on an opinion of value in the appraisal process and resulting document.
A home inspector analyzes the condition of the home and its major components and reports their findings.