Myth: The value that is assessed by the appraiser will be the same as the market value.
Reality: While most states uphold the concept that assessed value approximates estimated market value, this commonly is not the case.
Often when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the neighborhood have not been reassessed for quite some time, it may vary widely.
Myth: Depending on if the appraisal is done for the buyer or the seller, the opinion of value of the property will vary.
Reality: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, regardless of for whom the appraisal is created.
Myth: The replacement value of the property should 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 specific property, with neither being under undue influence to buy or sell.
Replacement value is the dollar amount necessary to reconstruct a property in-kind.
Myth: There are specific methods that real estate appraisers use to show the value of a home, like the price per square foot.
Reality: There are many numerous ways that an appraiser will use to make an in-depth analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable properties.
Myth: In a strong economy - when the prices of homes in a given area are reported to be increasing by a particular percentage - the values of individual properties in the proximity can be expected to increase by 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.
This is true in strong economic times as well as bad.
Myth: The house's exterior is determinate of the expected price of the property; there is no need to do an interior appraisal.
Reality: There are a multitude of different variables that determine the value of a home; these factors include area, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from just looking at the home from the outside.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their property, they legally own their appraisal.
Reality: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report.
Home buyers have to be given a copy of the appraisal report through request due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lending agency.
Reality: A home buyer should definitely read through their report; there will probably be some questions or some concerns about the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a wealth of data contained in an appraisal report that could be useful to the home buyer 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: The only reason someone would order an appraisal is if a home needs its value estimated in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and often do provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you have had a home inspection.
Reality: A home inspection report serves a completely different purpose than an appraisal report.
The appraiser finds an opinion of value in the appraisal process and resulting appraisal report.
A home inspector analyzes the condition of the home and its main components and reports these findings.
