Myth: Market value has to be the same as the assessed value of the property.
Reality: While most states uphold the concept that assessed value approximates estimated market value, this generally is not the case.
Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are perfect examples of why the price can vary.
Myth: The appraised value of a property will change depending upon whether the appraisal is provided for the buyer or the seller.
Reality: The appraised value of the home does not affect the pay of the appraiser; as such, the appraiser has no preconceived interest in the price of the home. This means that he will render business with impartiality and independence regardless of for whom the appraisal is created.
Myth: The replacement cost of the house is always in line with the market value.
Reality: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under duress to buy or sell.
Replacement cost is the dollar amount required to rebuild a house in-kind.
Myth: Certain formulae, such as the price per square foot of the property, are what appraisers use to come to the value of a home.
Reality: An appraisal is an amalgamation of data based on the house's size, location, proximity to specific facilities, the condition of the home and the values of recent comparable sales. You can count on BOB'S APPRAISAL SERVICE's staff to be honest in assessing this data.
Myth: As properties increase in value by a certain percentage - in a robust economic state - the homes in proximity are expected to appreciate by the same amount.
Reality: All increase of value is on a one-on-one basis, concluded by data on relevant considerations and the data of comparable houses.
It makes no difference if the economy is strong or bad.
Myth: You can often see what a property is worth simply by looking at the outside.
Reality: Home value is concluded by a multitude of variables, including area, condition, improvements, amenities, and market trends.
An outside-only inspection obviously can't provide all of the data required.
Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your house, you own the provided appraisal report.
Reality: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the report.
Home buyers have to be provided with a copy of the report upon written request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the requirements of their lender.
Reality: A consumer should definitely look through their appraisal report; there will probably be some questions or some worries about the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes a valuable record for future reference, containing helpful 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a property during a sales transaction involving a lender.
Reality: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: An appraisal does not serve the same purpose as an inspection.
The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report.
The purpose of a home inspector is to determine the condition of the house and its major components, then compose a report on these findings.
