Myth: The value that is assessed by the appraiser is required to be the same as the market value.
Reality: While most states back the concept that assessed value equates estimated market value, this often is not the case.
Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged time.
Myth: The value of a property will differ depending upon whether the appraisal is produced for the buyer or the seller.
Reality: There is no personal interest on the part of the appraiser in the outcome of the analysis, therefore he will conduct his work with impartiality and independence, regardless of for whom the appraisal is created.
Myth: The replacement value of the home should be on par with the market value.
Reality: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property.
The replacement cost is the dollar amount needed to rebuild a house in-kind.
Myth: There are certain ways that appraisers use to find the value of a property, like the price per square foot.
Reality: Appraisers complete a comprehensive analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: As homes increase in value by a specific percentage - in a strong economy - the homes around the appreciating properties are expected to increase by the same amount.
Reality: Any value an appraiser reports concerning a particular house is always personalized, based on certain factors found from the data of comparable homes and other specifications within the property itself.
This is true in excellent economic times as well as bad.
Myth: You can often find what a home is worth simply by looking at the exterior.
Reality: To conclude a concrete value beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends.
As you can see, none of these things can be derived just by viewing the home from the outside.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their house, they legally own their appraisal report.
Reality: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that purchased the appraisal.
Home buyers must be supplied with a copy of the report upon written request due to the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even care about what the appraisal report contains so long as their lending institution is satisfied.
Reality: It is almost imperative for home buyers to go through a copy of their 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.
Also, the report makes an excellent record for future reference, containing useful and often-revealing 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 order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending company.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection report.
Reality: An appraisal does not fulfill the same purpose as an inspection.
An appraiser forms an opinion of value in the appraisal process and resulting document.
The job of a home inspector is to approximate the condition of the home and its main components, then create a report on these inspection.