Myth: Market value must be the same as the assessed value of the property.
Reality: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always.
Often when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the Somerset have not been reassessed for quite some time, it may vary widely.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the property will vary.
Reality: There is no real interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is ordered.
Myth: Any time market value is calculated, it should match the replacement cost of the house.
Reality: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house.
Replacement cost is the dollar amount necessary to rebuild a home in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to come to the value of a home.
Reality: Appraisers complete a full analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: When the economy is doing well and the sales prices of homes are found to be increasing by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.
Reality: All appreciation of value is on a case-by-case basis, found by data on relevant considerations and the data of comparable properties.
It doesn't matter if the economy is doing well or declining.
Myth: The house's exterior is determinate of the actual value of the house; it is unnecessary to do an interior appraisal.
Reality: There are a number of different factors that show property value; these factors include area, condition, improvements, amenities, and market trends.
An external inspection obviously can't provide all of the information required.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their property, they legally own their appraisal.
Reality: Unless a lender releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal.
By the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be given it by their lender.
Myth: It doesn't mean anything to consumers what's in the appraisal so long as it satisfies the requirements of their lending company.
Reality: A home buyer should definitely inspect their report; there could be some questions or some worries 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.
There is a great deal of data stored in an appraisal report that can be useful to the consumer 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 region.
Myth: The only reason someone would order an appraisal is if a home needs its value assessed in a lender-based sales transaction.
Reality: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't need to get an appraisal if you get a home inspection.
Reality: A home inspection serves a completely different purpose than an appraisal report.
An appraiser concludes on an opinion of value in the appraisal process and resulting report.
House inspectors will compose a report that will determine the condition of the home and its major components and possible damage.
