Myth: Assessed value will always be equal to market value.
Reality: While most states uphold the concept that assessed value is the same as estimated market value, this commonly is not the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.
Myth: The buyer or the seller may have impact in the cost of the home depending upon for whom the appraiser is working.
Reality: The appraiser has no vested interest in the outcome of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value of the property should be on par with the market value.
Reality: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement cost is the dollar amount necessary to rebuild a property in-kind.
Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the value of a property.
Reality: Appraisers complete a detailed analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: When the economy is robust and the sales prices of homes are found to be appreciating by a certain percentage, the other houses in the proximity can be expected to increase based on that same percentage.
Reality: The appreciation of a specific property is always determined on a case-by-case basis, factoring in data on comparable houses and other relevant elements. It doesn't matter if the economy is on the rise or declining.
Myth: The home's exterior is determinate of the actual value of the house; there is no need to do an interior inspection.
Reality: There are a number of different factors that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data necessary.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their home, they own their appraisal.
Reality: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the report. Home buyers must be provided with a version of the document upon written request as per the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal document so long as it exceeds the requirements of their lending company.
Reality: It is almost imperative for consumers to read a copy of their report so that they can verify the accuracy of the report, in case it's required 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 data contained in a report that could 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 vicinity.
Myth: Appraisals are ordered only to estimate home values in home sales involving mortgage-lending deals.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a variety of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is the same as a home inspection.
Reality: A home inspection report has a completely different purpose than an appraisal report. An appraiser finds an opinion of value in the appraisal process and resulting appraisal report. House inspectors will produce a report that will show the condition of the house and its major components and possible damage.