Myth: Assessed value should always be the same as market value.
Reality: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always.
Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended period.
Myth: The appraised value of a house will be different depending upon if the appraisal is ordered for the buyer or the seller.
Reality: There is no vested interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is ordered.
Myth: Any time market value is determined, it should equal the replacement cost of the house.
Reality: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property.
The replacement cost is the dollar amount needed to reconstruct a house in-kind.
Myth: Specific formulae, like the price per square foot, are the methods appraisers use to arrive at the value of a house.
Reality: An appraisal is an assertion of data based on the home's size, location, proximity to undesirable facilities, the condition of the property and the values of recent comparable sales. You can count on Appraisal Network's appraisers to be honest in assessing this information.
Myth: When the economy is strong and the sales prices of houses are reported to be rising by a certain percentage, the other homes in the area can be expected to increase based on that same percentage.
Reality: All appreciation of value is on a one-on-one basis, concluded by data on relevant conditions and the data of comparable properties.
It makes no difference if the economy is excellent or terrible.
Myth: Just examining what the house looks like on the outside gives an excellent idea of its value.
Reality: House value is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
An outside-only inspection obviously can't provide all of the data necessary.
Myth: Considering that the consumer is the party who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document.
Consumers must be given a copy of the report upon written request due to the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the necessities of their lender.
Reality: It is very important for home buyers to check over a copy of their report so that they can verify the accuracy of the report, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes a near perfect record for future reference, comprised of useful and often-revealing information - 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: Appraisals are ordered only to assess building values in property sales involving mortgage-lending deals.
Reality: Appraisers can have many different qualifications and designations which allow them to perform a multitude 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: You don't have to get an appraisal if you order a home inspection.
Reality: A home inspection report has a completely different purpose than an appraisal report.
The appraiser finds an opinion of value in the appraisal process and resulting appraisal.
House inspectors will create a report that will determine the condition of the house and its major components and possible damage.