Myth: Assessed value should be the same as market value.
Reality: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always.
Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an prolonged time.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the value of the home will vary.
Reality: There is no real interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is ordered.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the house.
Reality: Market value is found by what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under duress to buy or sell.
Replacement cost is the dollar amount required to reconstruct a property in-kind.
Myth: There are certain methods that appraisers use to show the value of a property, like the price per square foot.
Reality: Appraisers complete a detailed analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: In a strong economy - when the values of houses in a given area are found to be appreciating by a certain percentage - the values of individual houses in the area can be expected to increase by that same percentage.
Reality: The appreciation of a specific property has to be determined on an individualized basis, factoring in information on comparable properties and other relevant considerations.
This is true in good economic times as well as poor.
Myth: The house's exterior is determinate of the actual value of the property; there is no need to do an interior appraisal.
Reality: To determine a conclusive value beyond all doubt, an appraiser must assess the property on a variety of factors based on location, condition, improvements, amenities, and current market trends.
Obviously, none of these things can be found simply by examining the home from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance real estate, you own the produced appraisal report.
Reality: Unless a lending agency releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal.
By the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be given it by their lending agency.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the requirements of their lender.
Reality: Only when home buyers look at a copy of their 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.
Also, the appraisal makes a near perfect record for future reference, comprised of useful and often-revealing data - 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 vicinity.
Myth: Appraisers are hired only to estimate home values in home sales involving mortgage-lending deals.
Reality: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no need to get an appraisal if you have had a home inspection.
Reality: A home inspection report has a completely different purpose than an appraisal.
The point of an appraisal report is to find an opinion of market value during the appraisal process and the completion of the appraisal report.
The point of a home inspector is to determine the condition of the house and its main components, then produce a report on these inspection.
