Myth: The value that is assessed by the appraiser will be exactly the same as the market value.
Reality: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always.
Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby properties are excellent examples of why there might be a differential in price.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the appraised value of the home will vary.
Reality: The appraiser has no vested interest in the result of the report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement cost of the property should be on par with the market value.
Reality: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property.
If the home were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to come to the value of a house.
Reality: An appraisal is an amalgamation of information based on the house's size, location, proximity to some facilities, the condition of the home and the values of recent comparable sales. You can rely on Tight & Right Real Estate Valuation's appraisers to be honest in assessing this data.
Myth: In a robust economy - when the values of homes in a given county are found to be rising by a particular percentage - the values of individual houses in the area can be expected to increase by that same percentage.
Reality: Any value an appraiser reports in regards to a specific house is always personalized, based on certain factors found from the data of comparable properties and other considerations within the home itself.
It doesn't matter if the economy is on the rise or declining.
Myth: Just examining what the home looks like on its exterior gives an idea of its value.
Reality: Home value is concluded by a multitude of variables, including - but not limited to - location, condition, improvements, amenities, and market trends.
Obviously, none of these factors can be derived simply by examining the property from the outside.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their house, they own their appraisal report.
Reality: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal.
However, home buyers have to be provided with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even worry about what the report contains so long as their lending company is satisfied.
Reality: It is very important for home buyers to check over a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is an incredible amount of data contained in a report that can 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 hire an appraiser unless you are trying to get an estimate of the value of a home during a sales transaction involving a lender.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a series 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: An appraisal is the same as a home inspection report.
Reality: A home inspection report serves a completely different purpose than an appraisal report.
The function of an appraisal is to form an opinion of market value during the appraisal process and the production of the report.
The task of a home inspector is to find the condition of the home and its main components, then write a report on these conclusions.