Myth: The value that is ascertained by the appraiser must be the same as the market value.
Reality: While most states support the concept that assessed value equates estimated market value, this generally is not the case.
Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the cost of the house will vary.
Reality: The appraiser has no vested interest in the outcome of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: The replacement cost of the home is always in line with the market value.
Reality: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home.
The dollar amount needed to rebuild a house is what shows the replacement cost.
Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to arrive at the value of a home.
Reality: There are many different calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable houses.
Myth: In a strong economy - when the values of houses in a given region are found to be increasing by a certain percentage - the values of individual properties in the vicinity can be expected to rise by that same percentage.
Reality: Any value an appraiser derives concerning a particular home is always personalized, based on certain factors found from the data of comparable houses and other specifications within the home itself.
It doesn't matter if the economy is doing well or declining.
Myth: You can generally find what a home is worth simply by looking at the outside.
Reality: There are a number of different factors that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends.
An external inspection obviously can't provide all of the information necessary.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance your home, you own the produced appraisal.
Reality: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report.
Home buyers have to be supplied with a version of the document upon written request because of the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even care about what the appraisal contains so long as their lender is satisfied.
Reality: It is almost imperative for consumers to check over a copy of their report so that they can double-check the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the report makes an excellent record for future reference, filled with helpful 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 area.
Myth: The only reason someone would order an appraisal is if a home needs its value estimated in a lender sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you order a home inspection.
Reality: Appraisal reports are nothing like a home inspection report.
The task of the appraiser is to come to an opinion of value in the appraisal process and through producing the report.
A home inspector determines the condition of the property and its major components and reports their findings.