Myth: The value that is assessed by the appraiser will be exactly the same as the market value.
Reality: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always.
Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are exact examples of why there might be a differential in price.
Myth: The buyer or the seller often will have impact in the cost of the house depending upon for whom the appraiser is working.
Reality: The value of the home does not affect the salary of the appraiser; as a result, the appraiser has no preconceived interest in the price of the house. What this means is he will render task with impartiality and objectivity regardless of for whom the appraisal is produced.
Myth: Any time market value is calculated, it should equal the replacement cost of the house.
Reality: The way market value is derived is based on what a home buyer would likely pay a willing seller for a house without being under pressure from any external group to purchase or sell.
Replacement cost is the dollar amount necessary to rebuild a property in-kind.
Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to determine the value of a home.
Reality: There are many different processes that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable houses.
Myth: As houses appreciate by a certain percentage - in a strong economy - the houses around the appreciating properties are figured to appreciate by the same amount.
Reality: The appreciation of a certain house has to be concluded on an individualized basis, factoring in data on comparable houses and other relevant elements.
This is true in robust economic times as well as bad.
Myth: The home's exterior is determinate of the actual value of the home; there is no need to do an interior inspection.
Reality: To find a genuine value beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and current market trends.
As you can see, none of these variables can be found just by looking at the house from the outside.
Myth: Considering that the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Reality: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal.
However, home buyers have to be given a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal so long as it meets the necessities of their lending company.
Reality: Only when consumers examine a copy of their appraisal report can they double-check its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can double as a record for the future, containing an exorbitant amount of data - including, but certainly 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 vicinity.
Myth: The only reason someone would order an appraisal is if a house needs its value estimated in a lender sales transaction.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a multitude of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: Appraisal reports are completely different than a home inspection.
The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through producing the report.
A home inspector determines the condition of the house and its major components and reports these findings.
