Myth: Market value should be similar to the assessed value of the property.
Reality: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always.
There are times when interior remodeling has been done and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for a good length of time, it may vary widely.
Myth: The buyer or the seller sometimes may have an influence in the cost of the home depending upon for whom the appraiser is working.
Reality: There is no vested interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is written.
Myth: The replacement value of the property will be on par with the market value.
Reality: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a particular house, with neither being under duress to buy or sell.
The replacement cost is the dollar amount required to reconstruct a property in-kind.
Myth: There are certain ways that real estate appraisers use to find the value of a house, like the price per square foot.
Reality: Appraisers make a comprehensive analysis of all factors pertaining to the value of a property, 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 increasing by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.
Reality: Any value an appraiser reports in regards to a certain property is always individualized, based on certain factors pulled from the data of comparable homes and other considerations within the property itself.
This is true in good economic times as well as bad.
Myth: Just examining what the house looks like on its exterior gives a good idea of its value.
Reality: To conclude a solid value beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, condition, improvements, amenities, and market trends.
Obviously, none of these things can be derived simply by inspecting the home from the exterior.
Myth: Because the consumer is the person who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Reality: The document is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal.
Consumers have to be given a copy of the report through 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 needs of their lender.
Reality: It is almost imperative for consumers to check over a copy of their appraisal so that they can double-check the accuracy of the document, 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 stored in an appraisal report that should 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 sales transaction.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a series 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: There's no need to get an appraisal if you order a home inspection.
Reality: A home inspection report serves a completely different purpose than an appraisal report.
The purpose of the appraiser is to come to an opinion of value in the appraisal process and through producing the report.
House inspectors will write a report that will express the condition of the property and its major components and possible damage.