Myth: The value that is ascertained by the appraiser will be the same as the market value.
Reality: While most states uphold the idea that assessed value approximates estimated market value, this usually is not the case.
Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are perfect examples of why the price can vary.
Myth: The opinion of value of a home will change depending upon if the appraisal is ordered for the buyer or the seller.
Reality: The appraiser has no vested interest in the outcome of the appraisal and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will be the same as replacement cost.
Reality: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property.
If the property were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: There are specific ways that appraisers use to determine the opinion of value of a house, like the price per square foot.
Reality: There are many different methods that an appraiser will use to make a detailed investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable properties.
Myth: As homes appreciate by a certain percentage - in a strong economy - the properties in proximity are expected to increase by the same amount.
Reality: All increase of value is on a one-on-one basis, determined by information on relevant elements and the data of comparable houses.
It makes no difference whether the economy is strong or bad.
Myth: You can commonly find what a house is worth simply by looking at the outside.
Reality: There are a number of different variables that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from simply viewing the house from the outside.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to purchase or refinance your house, you own the provided appraisal report.
Reality: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal.
Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be given one by their lending agency.
Myth: It doesn't concern consumers what's in the appraisal so long as it meets the requirements of their lending agency.
Reality: Only when home buyers examine a copy of their appraisal 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.
There is an incredible amount of information stored 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a house during a sales transaction involving a lending institution.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Reality: A home inspection report has a completely different purpose than an appraisal report.
The task of the appraiser is to form an opinion of value in the appraisal process and through producing the report.
House inspectors will write a report that will show the condition of the house and its major components and possible damage.
