Myth: The value that is ascertained by the appraiser should be equivalent to the market value.
Reality: This usually isn't true; most states do support the idea 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 houses are excellent examples of why there might be a differential in price.
Myth: The buyer or the seller may have leverage in the value of the house depending upon for whom the appraiser is working.
Reality: The appraiser has no vested interest in the outcome of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement value of the home will be on par with the market value.
Reality: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a home without being under pressure from any outside party to buy or sell.
Replacement value is the dollar amount necessary to rebuild a house in-kind.
Myth: Specific methods, like the price per square foot of the property, are the methods appraisers use to determine the value of a property.
Reality: Appraisers complete an exhaustive analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: In a strong economy - when the values of houses in a given neighborhood are reported to be increasing by a certain percentage - the prices of individual houses in the vicinity can be expected to increase by that same percentage.
Reality: All appreciation of value is on an individual basis, concluded by data on relevant considerations and the data of comparable houses.
It makes no difference whether the economy is robust or poor.
Myth: Just seeing what the house looks like on its exterior gives a good idea of its value.
Reality: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends.
As you can see, none of these factors can be found simply by inspecting the house from the exterior.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their house, they own their appraisal report.
Reality: The report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report.
By the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with it by their lending agency.
Myth: There's no reason for home buyers to even care about what the report contains so long as their lending institution is fine with the contents therein.
Reality: Only when consumers read a copy of their appraisal can they verify its accuracy and know if they should ask questions. 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending agency.
Reality: Appraisers can have many different qualifications and designations which allow them to perform 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: You shouldn't need to get an appraisal if you order a home inspection.
Reality: An appraisal does not fulfill the same purpose as an inspection.
The purpose of the appraiser is to find an opinion of value in the appraisal process and through producing the report.
House inspectors will produce a report that will explain the condition of the house and its major components and possible damage.