Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Reality: While most states support the concept that assessed value equates estimated market value, this commonly is not the case.
Usually when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the area have not been reassessed for a good length of time, it may vary widely.
Myth: The buyer or the seller will have impact in the value of the property depending upon for whom the appraiser is working.
Reality: The price of the property does not affect the payment of the appraiser; as a result, the appraiser has no personal interest in the price of the house. Obviously, he will conduct services with impartiality and objectivity regardless of for whom the appraisal is produced.
Myth: The replacement value of the house will be on par with the market value.
Reality: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a property without being under pressure from any external party to purchase or sell.
If the home were rebuilt, the dollar amount required to do so would be the replacement cost.
Myth: There are certain methods that real estate appraisers use to determine the value of a property, such as the price per square foot.
Reality: Appraisers make a full analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: When the economy is strong and the sales prices of homes are found to be appreciating by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.
Reality: Any value an appraiser derives concerning a certain house is always individualized, based on certain factors found from the data of comparable homes and other considerations within the property itself.
It makes no difference if the economy is powerful or terrible.
Myth: Just looking at what the house looks like on the outside gives an excellent idea of its value.
Reality: Property value is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
An exterior inspection definitely can't provide all of the data needed.
Myth: Considering that the consumer is the person who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: The appraisal report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal.
Home buyers have to be provided with a copy of the appraisal report through request because of the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even care about what the report contains so long as their lending company is fine with the contents therein.
Reality: It is very important for consumers to peruse a copy of their report so that they can double-check the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of information contained in an appraisal report that should 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 region.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending institution.
Reality: Hiring an appraiser can fulfill a variety of necessities 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: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal does not serve the same purpose as an inspection report.
The appraiser finds an opinion of value in the appraisal process and resulting document.
A home inspector assesses the condition of the property and its main components and reports these findings.
