Myth: Assessed value should be similar to market value.
Reality: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always.
Generally when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for quite a while, it may vary widely.
Myth: The appraised value of a property will be different depending upon whether the appraisal is produced for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is conducted.
Myth: The replacement cost of the home should be on par with the market value.
Reality: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain home, with neither being under pressure to buy or sell.
The dollar amount needed to rebuild a house is what forms the replacement cost.
Myth: There are specific ways that appraisers use to determine the opinion of value of a property, like the price per square foot.
Reality: Appraisers complete a full analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: In a robust economy - when the sales prices of homes in a given area are reported to be appreciating by a certain percentage - the values of individual properties in the vicinity can be expected to increase by that same percentage.
Reality: Any value an appraiser reports concerning a particular house is always individualized, based on certain factors concluded from the data of comparable homes and other considerations within the property itself.
It makes no difference if the economy is excellent or poor.
Myth: The house's exterior is determinate of the expected price of the property; there is no need to do an interior appraisal.
Reality: House value is determined by a number of variables, including location, condition, improvements, amenities, and market trends.
An outside-only inspection certainly can't provide all of the information needed.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they own their appraisal.
Reality: The report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal.
Due the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be provided with one by their lending agency.
Myth: There's no point for home buyers to even concern themselves with what the appraisal contains so long as their lending company is fine with the contents therein.
Reality: It is almost imperative for consumers to read a copy of their report so that they can verify the accuracy of the report, in case they 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 information contained in an appraisal report that can be useful to the home buyer 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 region.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a home during a sales transaction involving a lender.
Reality: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not fulfill the same purpose as an inspection.
The point of an appraisal is to arrive at an opinion of market value during the appraisal process and the completion of the appraisal.
The job of a home inspector is to find the condition of the house and its main components, then create a report on their inspection.
