Myth: Assessed value should be similar to 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.
Often when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the area have not been reassessed for years or more, it may vary widely.
Myth: The buyer or the seller will have some pull in the cost of the property depending upon for whom the appraiser is working.
Reality: The appraiser has no vested interest in the result of the appraisal and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value of the property is always in line with the market value.
Reality: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific property.
Replacement value is the dollar amount needed to reconstruct a property in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to figure out the value of a home.
Reality: There are many numerous processes that an appraiser will use to make a full analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable properties.
Myth: When the economy is strong and the sales prices of homes are reported to be appreciating by a certain percentage, the other houses in the vicinity can be expected to rise based on that same percentage.
Reality: An increase in value of a specific house is always concluded on an individualized basis, factoring in information on comparable homes and other relevant considerations.
It doesn't matter if the economy is doing well or declining.
Myth: Just looking at what the property looks like on the outside gives an excellent idea of its value.
Reality: Property value is concluded by a multitude of variables, including area, condition, improvements, amenities, and market trends.
An exterior inspection certainly can't provide all of the data necessary.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to purchase or refinance your house, you own the produced appraisal report.
Reality: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report.
However, consumers have to be given a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the needs of their lending company.
Reality: It is very important for home buyers to look at a copy of their 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.
Also, the report makes a valuable record for future reference, containing useful and often-revealing information - including, but 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending agency.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a variety of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Reality: An appraisal report does not serve the same purpose as an inspection report.
The task of the appraiser is to form an opinion of value in the appraisal process and through producing the report.
House inspectors will create a report that will determine the condition of the home and its major components and possible damage.