Myth: Market value must be equivocal to the assessed value of the property.
Reality: While most states support the idea that assessed value equates estimated market value, this generally is not the case.
Usually when interior remodeling has occurred and the assessor is has not investigated the improvement or other houses in the area have not been reassessed for quite a while, it may vary widely.
Myth: The opinion of value of a home will differ depending upon if the appraisal is produced for the buyer or the seller.
Reality: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, regardless of for whom the appraisal is ordered.
Myth: The replacement value of the house will be on par with the market value.
Reality: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific house.
The dollar amount necessary to reconstruct a property is what constitutes the replacement cost.
Myth: Specific formulae, like the price per square foot, are what appraisers use to ascertain the value of a home.
Reality: An appraisal report is a collection of data based on the house's size, location, proximity to specific facilities, the condition of the property and the values of recent comparable sales. You can depend on Appraisal Metrics's staff to be ethical in assessing this information.
Myth: In a powerful economy - when the sales prices of homes in a given neighborhood are reported to be increasing by a particular percentage - the values of individual houses in the vicinity can be expected to appreciate by that same percentage.
Reality: All appreciation of value is on a one-on-one basis, determined by information on relevant elements and the data of comparable houses.
It doesn't matter if the economy is on the rise or declining.
Myth: Just examining what the home looks like on the outside gives a good idea of its value.
Reality: There are a number of different variables that determine property value; these factors include location, condition, improvements, amenities, and market trends.
An exterior inspection obviously can't provide all of the information needed.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to buy or refinance real estate, you own the produced appraisal.
Reality: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal.
However, home buyers must be supplied with a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their report so long as it exceeds the needs of their lending company.
Reality: It is a very good idea for home buyers to look at a copy of their appraisal so that they can verify the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can double as a record for the future, as it contains a great deal of data - including, but certainly 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending institution.
Reality: Appraisers can have many different qualifications and designations which allow them to perform a multitude 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: An appraisal report is no different than a home inspection.
Reality: Appraisal reports are completely different than a home inspection report.
An appraiser finds an opinion of value in the appraisal process and resulting document.
The purpose of a home inspector is to determine the condition of the home and its major components, then compose a report on these conclusions.