Myth: Assessed value should always equate 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. At times when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the area have not been reassessed for quite a while, it may vary widely.
Myth: The appraised value of a property will be different depending upon if 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 conduct his work with impartiality and independence, no matter of for whom the appraisal is conducted.
Myth: Market value should equal replacement cost.
Reality: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific property, with neither being under pressure to buy or sell. If the property were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: There are specific ways that real estate appraisers use to determine the cost of a property, such as the price per square foot.
Reality: Appraisers make a comprehensive analysis of all factors in consideration to the value of a house, 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 properties are reported to be increasing by a certain percentage, the other properties in the vicinity can be expected to appreciate based on that same percentage.
Reality: All appreciation of value is on a case-by-case basis, concluded by information on relevant elements and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
Myth: You can commonly tell what a house is worth simply by looking at the exterior.
Reality: To find a conclusive value beyond all doubt, an appraiser must inspect the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. An outside-only inspection obviously can't provide all of the data necessary.
Myth: Considering that the consumer is the person who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: Unless a lender releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal. However, home buyers must be given a copy of the appraisal upon written request, under the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even concern themselves with what the appraisal report contains so long as their lending agency is fine with the contents therein.
Reality: A consumer should definitely inspect their appraisal; there could be some questions or some concerns with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored in a report that can be useful to the consumer 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 proximity.
Myth: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of wants 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 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 concludes on an opinion of value in the appraisal process and resulting report. The purpose of a home inspector is to find the condition of the home and its major components, then write a report on these findings.