Myth: Market value should 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.
Generally when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary widely.
Myth: The buyer or the seller often will have impact in the cost of the property depending upon for whom the appraiser is working.
Reality: The opinion of value of the property does not affect the salary of the appraiser; because of this, the appraiser has no pressured interest in the price of the property. This means that he will render job with impartiality and independence regardless of for whom the appraisal is conducted.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Reality: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a property without being under duress from any outside party to purchase or sell.
The dollar amount required to reconstruct a home is what shows the replacement cost.
Myth: Specific formulae, like the price per square foot, are the methods appraisers use to arrive at the value of a home.
Reality: Appraisers complete an exhaustive 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 rising by a certain percentage, the other homes in the neighborhood can be expected to increase based on that same percentage.
Reality: Any value an appraiser derives in regards to a specific home is always personalized, based on certain factors derived from the information of comparable homes and other considerations within the house itself.
It doesn't matter if the economy is on the rise or declining.
Myth: You can generally find what a house is worth simply by looking at the outside.
Reality: To determine a conclusive value beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and current market trends.
There's no real way to get all of this information from simply looking at the property from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to buy or refinance real estate, you own the provided appraisal report.
Reality: Legally, the appraisal is owned by the lending agency unless the lender releases their interest in the report.
Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be provided with one by their lender.
Myth: Home buyers need not worry about what is in their appraisal document so long as it meets the needs of their lending agency.
Reality: Only when consumers look at a copy of their report can they verify its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes a valuable record for future reference, filled with 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 assess home values in house sales involving mortgage-lending deals.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a series of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection report.
Reality: A home inspection report has a completely different purpose than an appraisal report.
The appraiser decides upon an opinion of value in the appraisal process and resulting document.
The job of a home inspector is to approximate the condition of the house and its major components, then compose a report on their findings.
