Myth: Assessed value should always equate market value.
Reality: While most states back the suggestion that assessed value is equal to estimated market value, this often is not the case. Often when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the Rome have not been reassessed for years or more, it may vary widely.
Myth: The appraised value of a property will change depending upon if the appraisal is conducted for the buyer or the seller.
Reality: There is no personal interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, no matter of for whom the appraisal is conducted.
Myth: Market value will equal replacement cost.
Reality: The way market value is derived is based on what a buyer would likely pay a willing seller for a house without being under pressure from any outside party to purchase or sell. If the property were reconstructed, the dollar amount required to do so would form the replacement cost.
Myth: There are certain ways that appraisers use to show the cost of a property, like the price per square foot.
Reality: Appraisers complete a comprehensive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: As homes appreciate by a specific percentage - in a strong economy - the homes nearby are expected to increase by the same amount.
Reality: The appreciation of a specific home is always concluded on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. This is true in good economic times as well as poor.
Myth: The property's outside is determinate of the actual value of the house; there is no need to do an interior inspection.
Reality: To find a definite value beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data required.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their house, they legally own their appraisal report.
Reality: Legally, the document is owned by the lending agency unless the lender releases their interest in the document. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with it by their lending agency.
Myth: Consumers need not worry about what is in their report so long as it meets the necessities of their lending company.
Reality: A consumer should definitely look through their appraisal; there may be some questions or some concerns with the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a property during a sales transaction involving a lender.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no need to get an appraisal if you order a home inspection.
Reality: Appraisal reports are completely different than a home inspection. The task of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. The purpose of a home inspector is to determine the condition of the house and its major components, then provide a report on these findings.
