Myth: Market value should be the same as the assessed value of the property.
Reality: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby homes are prime examples of why this occurs.
Myth: The buyer or the seller sometimes may have leverage in the value of the home depending upon for whom the appraiser is working.
Reality: The appraiser has no personal interest in the result of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the house.
Reality: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. The replacement cost is the dollar amount required to reconstruct a property in-kind.
Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the value of a property.
Reality: An appraisal report is a collection of information based on the property's size, location, proximity to specific facilities, the condition of the house and the values of recent comparable sales. You can rely on Anderson Appraisal, LLC's appraisers to be ethical in assessing this data.
Myth: When the economy is doing well and the sales prices of houses are found to be appreciating by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.
Reality: An increase in value of a certain property has to be determined on a case-by-case basis, factoring in data on comparable houses and other relevant elements. This is true in robust economic times as well as poor.
Myth: Just seeing what the house looks like on the outside gives a good idea of its value.
Reality: There are a multitude of different variables that show the value of a house; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived just by inspecting the home from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for the loan to buy or refinance your home, you own the produced appraisal report.
Reality: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report. Home buyers must be provided with a version of the document upon written request as per the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even concern themselves with what the appraisal contains so long as their lender is fine with the contents therein.
Reality: A home buyer should definitely look through their appraisal report; there may be some questions or some worries with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, comprised of helpful and often-revealing information - including 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 proximity.
Myth: Appraisals are ordered only to assess building values in home sales involving mortgage-lending transactions.
Reality: Depending upon their qualifications and designations, appraisers can and will provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: Appraisal reports are definitely not the same as a home inspection. An appraiser finds an opinion of value in the appraisal process and resulting document. The task of a home inspector is to approximate the condition of the property and its major components, then produce a report on these inspection.
