Myth: The value that is assessed by the appraiser must be equivalent to the 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.
Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby homes are exact examples of why the price can vary.
Myth: Depending on if the appraisal is produced for the buyer or the seller, the appraised value of the property will vary.
Reality: The appraised value of the home does not affect the pay of the appraiser; as such, the appraiser has no personal interest in the value of the home. What this means is he will render job with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the property.
Reality: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under influence from any outside party to buy or sell.
Replacement value is the dollar amount required to rebuild a home in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to conclude the value of a home.
Reality: An appraisal is an assertion of information concluded from the home's size, location, proximity to some facilities, the condition of the house and the values of recent comparable sales. You can depend on THE APPRAISAL SHOP's appraisers to be professional in assessing this data.
Myth: As homes increase in value by a certain percentage - in a robust economy - the properties nearby are expected to appreciate by the same amount.
Reality: All increase of value is on a one-on-one basis, found by information on relevant conditions and the data of comparable houses.
It makes no difference whether the economy is robust or on the decline.
Myth: Just examining what the home looks like on its exterior gives a good idea of its value.
Reality: Home value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
Obviously, none of these things can be found just by viewing the property from the exterior.
Myth: Since the consumer is the person who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Reality: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal.
By the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be provided with one by their lender.
Myth: There's no point for consumers to even care about what the appraisal contains so long as their lending institution is satisfied.
Reality: A home buyer should definitely inspect their document; there may be some questions or some worries with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is an incredible amount of data stored in an appraisal 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: Appraisals are ordered only to estimate building values in property sales involving mortgage-lending deals.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a lot 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: Appraisal reports are completely different than a home inspection report.
An appraiser forms an opinion of value in the appraisal process and resulting appraisal.
The job of a home inspector is to approximate the condition of the house and its major components, then produce a report on these findings.
