Myth: The value that is assessed by the appraiser is required to be equivalent to the market value.
Reality: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always.
Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or other houses in the High Point have not been reassessed for years or more, it may vary widely.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the value of the house will vary.
Reality: There is no personal interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is conducted.
Myth: The replacement cost of the house will be on par with the market value.
Reality: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home.
The dollar amount necessary to reconstruct a property is what forms the replacement cost.
Myth: Specific formulae, like the price per square foot of the property, are the ways appraisers use to arrive at the value of a home.
Reality: There are many varied formulae that an appraiser will use to make a detailed analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable houses.
Myth: When the economy is on the rise and the sales prices of properties are found to be rising by a certain percentage, the other properties in the vicinity can be expected to increase based on that same percentage.
Reality: The appreciation of a certain house has to be determined on an individualized basis, factoring in data on comparable properties and other relevant elements.
This is true in strong economic times as well as poor.
Myth: Just looking at what the house looks like on the outside gives an idea of its value.
Reality: There are a multitude of different factors that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends.
An external inspection certainly can't provide all of the data needed.
Myth: Since you're the one funding for the appraisal when applying for the loan to purchase or refinance your home, you own the provided appraisal.
Reality: Legally, the document is owned by the lender unless the lender relinquishes their interest in the document.
However, home buyers have to be supplied with a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even worry about what the report contains so long as their lending institution is fine with the contents therein.
Reality: A home buyer should definitely read through their report; there could be some questions or some worries about the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a wealth of information stored in an appraisal report that will probably 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 area.
Myth: Appraisers are hired only to assess real estate property values in house sales involving mortgage-lending deals.
Reality: Hiring an appraiser can fulfill a variety of necessities 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: You don't need to get an appraisal if you have had a home inspection.
Reality: An appraisal does not fulfill the same purpose as an inspection report.
The appraiser forms an opinion of value in the appraisal process and resulting appraisal.
A home inspector analyzes the condition of the house and its main components and reports these findings.
