Myth: Assessed value should be similar to market value.
Reality: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Often when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the neighborhood have not been reassessed for quite a while, it may vary widely.
Myth: The buyer or the seller often will have some pull in the cost of the house depending upon for whom the appraiser is working.
Reality: There is no real interest on the part of the appraiser in the outcome of the appraisal report, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is ordered.
Myth: The replacement value of the home will be on par with the market value.
Reality: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. If the property were reconstructed, the dollar amount needed to do so would make up the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the value of a home.
Reality: An appraisal is a collection of data concluded from the property's size, location, proximity to some facilities, the condition of the property and the values of recent comparable sales. You can rely on Gregory W. Easter, IFA's staff to be forthright in assessing this data.
Myth: In a robust economy - when the prices of houses in a given area are found to be appreciating by a particular percentage - the prices of individual properties in the vicinity can be expected to appreciate by that same percentage.
Reality: Any value an appraiser derives concerning a particular home is always individualized, based on certain factors derived from the data of comparable homes and other specifications within the home itself. This is true in strong economic times as well as poor.
Myth: You can often tell what a house is worth simply by looking at the outside.
Reality: There are a number of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply examining the home from the outside.
Myth: Because the consumer is the one who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given one by their lending company.
Myth: There's no point for consumers to even care about what the appraisal contains so long as their lending institution is satisfied.
Reality: It is very important for home buyers to look at a copy of their appraisal report so that they can verify the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in a 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 region.
Myth: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender-based sales transaction.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a lot of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Reality: An appraisal does not fulfill the same purpose as an inspection. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report. The purpose of a home inspector is to determine the condition of the property and its main components, then write a report on their inspection.