Myth: Market value must be the same as the assessed value of the property.
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.
Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an extended period of time.
Myth: Depending on if the appraisal is written for the buyer or the seller, the appraised value of the property will vary.
Reality: There is no vested interest on the part of the appraiser in the outcome of the analysis, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is created.
Myth: Market value will equate to replacement cost.
Reality: Market value is based on what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell.
If the home were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: There are specific ways that real estate appraisers use to show the opinion of value of a house, such as the price per square foot.
Reality: An appraisal is an amalgamation of information concluded from the home's size, location, proximity to undesirable facilities, the condition of the property and the values of recent comparable sales. You can depend on Anderson Appraisal, LLC's staff to be honest in assessing this information.
Myth: In a strong economy - when the prices of homes in a given area are reported to be rising by a particular percentage - the prices of individual houses in the area can be expected to appreciate by that same percentage.
Reality: The appreciation of a certain house is always determined on a case-by-case basis, factoring in data on comparable properties and other relevant elements.
It makes no difference whether the economy is robust or poor.
Myth: The home's exterior is determinate of the actual value of the house; there is no need to do an interior appraisal.
Reality: To conclude an accurate value beyond all doubt, an appraiser must examine the house on a variety of factors based on 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 exterior.
Myth: Because the consumer is the person who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Reality: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report.
Consumers have to be provided with a copy of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their report so long as it satisfies the necessities of their lending institution.
Reality: A consumer should definitely read through their document; there may be some questions or some concerns with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the report makes an excellent record for future reference, comprised of useful 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 area.
Myth: Appraisals are ordered only to estimate real estate property values in home sales involving mortgage-lending deals.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a variety of different services including - but 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 have had a home inspection.
Reality: An appraisal does not fulfill the same purpose as an inspection report.
The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report.
The task of a home inspector is to approximate the condition of the property and its major components, then provide a report on these findings.
