Myth: Market value has to be similar to the assessed value of the property.
Reality: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always.
Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an prolonged time.
Myth: The buyer or the seller will have impact in the cost of the home depending upon for whom the appraiser is working.
Reality: The appraiser has no personal interest in the outcome of the appraisal and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equal replacement cost.
Reality: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home.
If the property were rebuilt, the dollar amount needed to do so would set the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the value of a home.
Reality: There are many differing methods that an appraiser will use to make an in-depth analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable homes.
Myth: When the economy is on the rise and the sales prices of properties are reported to be increasing by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.
Reality: All appreciation of value is on a one-on-one basis, concluded by information on relevant elements and the data of comparable properties.
It doesn't matter if the economy is doing well or declining.
Myth: Just seeing what the house looks like on its exterior gives a good idea of its value.
Reality: There are a number of different variables that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends.
An exterior inspection certainly can't provide all of the data necessary.
Myth: Because the consumer is the one who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Reality: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending company that ordered the appraisal.
Consumers must be supplied with a version of the document upon written request as per the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even care about what the appraisal contains so long as their lending company is fine with the contents therein.
Reality: It is very important for consumers to check over a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need 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 invaluable 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 proximity.
Myth: Appraisers are hired only to estimate building values in house sales involving mortgage-lending deals.
Reality: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't have to get an appraisal if you order a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection.
The task of the appraiser is to form an opinion of value in the appraisal process and through producing the report.
A home inspector determines the condition of the building and its main components and reports their findings.
