Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Reality: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always.
Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the cost of the house will vary.
Reality: The value of the property does not affect the pay of the appraiser; because of this, the appraiser has no pressured interest in the price of the house. This means that he will provide task with impartiality and objectivity regardless of for whom the appraisal is provided.
Myth: Any time market value is determined, it should equal the replacement cost of the property.
Reality: Market value is based on what a willing buyer would likely pay a willing seller for a certain home, with neither being under undue influence to buy or sell.
If the property were reconstructed, the dollar amount needed to do so would be the replacement cost.
Myth: Certain formulae, like the price per square foot of the property, are the methods appraisers use to determine the value of a property.
Reality: There are many differing calculations that an appraiser will use to make a full analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable properties.
Myth: When the economy is doing well and the sales prices of properties are found to be increasing by a certain percentage, the other homes in the neighborhood can be expected to appreciate based on that same percentage.
Reality: An increase in value of a certain property is always determined on a case-by-case basis, factoring in data on comparable properties and other relevant specifications within the home itself.
It makes no difference whether the economy is robust or on the decline.
Myth: The house's exterior is determinate of the expected price of the property; it is unnecessary to do an interior appraisal.
Reality: There are a number of different variables that show the value of a house; these factors include location, condition, improvements, amenities, and market trends.
An exterior inspection certainly can't provide all of the data necessary.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance your house, you own the produced appraisal.
Reality: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal.
However, consumers must be provided with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it satisfies the requirements of their lending company.
Reality: It is almost imperative for home buyers to look at a copy of their appraisal so that they can verify the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of information contained in an appraisal 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: Appraisers are hired only to estimate home values in property sales involving mortgage-lending transactions.
Reality: Based upon their qualifications and designations, appraisers can and may provide a lot 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: A home inspection report serves a completely different purpose than an appraisal.
The job of the appraiser is to come to an opinion of value in the appraisal process and through creating the report.
A home inspector determines the condition of the building and its main components and reports their findings.
