Myth: Assessed value should always equate 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.
Usually when interior remodeling has been done and the assessor is unaware of the improvement or properties in the area have not been reassessed for years or more, it may vary widely.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the appraised value of the property will vary.
Reality: There is no personal interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, no matter of for whom the appraisal is conducted.
Myth: Any time market value is determined, it should match the replacement cost of the property.
Reality: Market value is arrived at through what a willing buyer would likely pay a willing seller for a certain house, with neither being under duress to buy or sell.
The dollar amount required to reconstruct a house is what shows the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the value of a home.
Reality: Appraisers make a detailed analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: As homes appreciate by a specific percentage - in a strong economic state - the properties in proximity are expected to appreciate by the same amount.
Reality: The appreciation of a certain house is always concluded on an individualized basis, factoring in data on comparable homes and other relevant elements.
It makes no difference whether the economy is powerful or on the decline.
Myth: You can commonly find what a home is worth simply by looking at the outside.
Reality: To determine a concrete value beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and current market trends.
There's no possible way to get all of this information from just examining the property from the outside.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance real estate, they own their appraisal.
Reality: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal.
However, consumers must be provided with a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their document so long as it exceeds the necessities of their lending agency.
Reality: It is a very good idea for home buyers to check over a copy of their report so that they can double-check the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes an invaluable record for future reference, comprised of useful and often-revealing information - including 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: The only reason someone would order an appraisal is if a house needs its value assessed in a lender sales transaction.
Reality: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: An appraisal does not fulfill the same purpose as an inspection.
The appraiser decides upon an opinion of value in the appraisal process and resulting report.
A home inspector determines the condition of the property and its main components and reports these findings.