Myth: The value that is ascertained by the appraiser is required to be equivalent to the market value.
Reality: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always.
Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are exact examples of why the price can vary.
Myth: The opinion of value of a home will be different depending upon if the appraisal is conducted for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the home should be on par with the market value.
Reality: Without any influence 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 cost is the dollar amount required to reconstruct a property in-kind.
Myth: Appraisers use a formula, such as a specific price per square foot, to arrive at the value of a house.
Reality: There are many numerous ways that an appraiser will use to make a comprehensive investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable homes.
Myth: As properties increase in value by a certain percentage - in a robust economic state - the homes within the same neighborhood are expected to increase by the same amount.
Reality: Any value an appraiser derives in regards to a particular house is always individualized, based on certain factors derived from the data of comparable properties and other specifications within the house itself.
It makes no difference whether the economy is powerful or poor.
Myth: Just seeing what the home looks like on the outside gives an excellent idea of its value.
Reality: House value is determined by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from just looking at the property from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance your house, you own the provided appraisal.
Reality: Legally, the document is owned by the lending company unless the lender relinquishes their interest in the report.
Under the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be given one by their lending agency.
Myth: Consumers need not worry about what is in their appraisal so long as it satisfies the needs of their lending company.
Reality: A consumer should definitely inspect their document; there may be some questions or some worries with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is an incredible amount of information stored in an appraisal report that will probably 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 proximity.
Myth: Appraisals are ordered only to assess house values in house sales involving mortgage-lending transactions.
Reality: Depending upon their qualifications and designations, appraisers can and do perform a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not fulfill the same purpose as an inspection report.
The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal.
House inspectors will create a report that will determine the condition of the home and its major components and possible damage.