Myth: Assessed value will always be similar to market value.
Reality: While most states back the suggestion that assessed value equates estimated market value, this usually is not the case.
Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the appraised value of the property will vary.
Reality: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is created.
Myth: The replacement value of the property will be on par with the market value.
Reality: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under pressure to buy or sell.
The dollar amount needed to reconstruct a home is what forms the replacement cost.
Myth: There are specific ways that real estate appraisers use to determine the value of a property, such as the price per square foot.
Reality: Appraisers complete a detailed analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: As properties appreciate by a certain percentage - in a strong economy - the properties around the appreciating properties are figured to appreciate by the same amount.
Reality: An increase in value of a certain property is always concluded on an individualized basis, factoring in information on comparable homes and other relevant considerations.
This is true in strong economic times as well as poor.
Myth: You can commonly tell what a home is worth simply by looking at the outside.
Reality: There are a number of different factors that show the value of a home; these factors include location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from simply examining the home from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance your home, you own the produced appraisal.
Reality: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal.
However, consumers must be provided with a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their appraisal document so long as it exceeds the necessities of their lending agency.
Reality: Only when consumers look over a copy of their report can they double-check 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 report makes a near perfect record for future reference, comprised of helpful and often-revealing information - including 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: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lender.
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: A property inspection serves the same purpose as an appraisal.
Reality: An appraisal does not serve the same purpose as an inspection.
The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report.
The purpose of a home inspector is to approximate the condition of the house and its major components, then write a report on their inspection.
