Myth: Assessed value will always 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.
Often when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the area have not been reassessed for a good length of time, it may vary widely.
Myth: The buyer or the seller often will have an influence in the cost of the house depending upon for whom the appraiser is working.
Reality: The appraiser has no vested interest in the outcome of the report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the house.
Reality: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any external group to purchase or sell.
If the home were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to conclude the value of a house.
Reality: Appraisers make an exhaustive 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: When the economy is doing well and the sales prices of homes are reported to be increasing by a certain percentage, the other houses in the vicinity can be expected to increase based on that same percentage.
Reality: An increase in value of a specific property must be concluded on a case-by-case basis, factoring in data on comparable properties and other relevant elements.
It makes no difference if the economy is strong or terrible.
Myth: The property's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.
Reality: Property value is concluded by a number of factors, including - but not limited to - location, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be derived simply by viewing the home from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance your house, you own the provided appraisal report.
Reality: Unless a lender releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal.
However, home buyers must be supplied with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the needs of their lending agency.
Reality: It is almost imperative for consumers to look at a copy of their report so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes an excellent record for future reference, filled with useful and often-revealing data - including 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 hire an appraiser is if a house needs its value assessed in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: Appraisal reports are definitely not the same as a home inspection.
The job of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report.
The task of a home inspector is to find the condition of the home and its main components, then produce a report on their findings.
