Myth: The value that is ascertained by the appraiser is required to be exactly the same as the market value.
Reality: While most states back the suggestion that assessed value is the same as estimated market value, this generally is not the case.
Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby houses are prime examples of why the price can vary.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the opinion of value of the house will vary.
Reality: The appraiser has no vested interest in the result of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should match the replacement cost of the house.
Reality: Without any influence from any external parties to buy 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 necessary to rebuild a property in-kind.
Myth: Certain methods, like the price per square foot, are the methods appraisers use to determine the value of a property.
Reality: There are many different processes 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 undesirable facilities and the values of recently sold comparable homes.
Myth: As houses appreciate by a specific percentage - in a strong economic state - the houses in proximity are figured to appreciate by the same amount.
Reality: The appreciation of a specific house must be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant considerations.
This is true in strong economic times as well as poor.
Myth: The property's exterior is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Reality: To find an accurate value beyond all doubt, an appraiser must assess the property on a variety of factors based on area, condition, improvements, amenities, and current market trends.
As you can see, none of these things can be found simply by viewing the property from the outside.
Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance their house, they legally own their appraisal report.
Reality: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal report.
Home buyers have to be supplied with a copy of the document through request due to the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even concern themselves with what the appraisal report contains so long as their lending institution is fine with the contents therein.
Reality: It is very important for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the report, in case there is a 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 data stored in an appraisal that should 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 area.
Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and will perform a variety of different 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: A home inspection report has a completely different purpose than an appraisal report.
An appraiser finds an opinion of value in the appraisal process and resulting document.
The purpose of a home inspector is to assess the condition of the property and its major components, then compose a report on their conclusions.
