Myth: Assessed value generally will equate market value.
Reality: It might be that California, like most states, supports the suggestion that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The value of a property will vary depending upon if the appraisal is provided for the buyer or the seller.
Reality: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is created.
Myth: Any time market value is calculated, it should equal the replacement cost of the property.
Reality: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. If the home were reconstructed, the dollar amount necessary to do so would be the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the worth of a home.
Reality: There are many different processes that an appraiser will use to make a comprehensive investigation of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the worth of recently sold comparable homes.
Myth: In a strong economy - when the costs of homes in a given neighborhood are found to be appreciating by a certain percentage - the worth of individual houses in the vicinity can be expected to increase by that same percentage.
Reality: Any price at which an appraiser arrives in regards to a specific home is always individualized, based on certain factors concluded from the data of comparable houses and other considerations within the home itself. This is true in excellent economic times as well as bad.
Myth: Just examining what the home looks like on its exterior gives an excellent idea of its worth.
Reality: There are a multitude of different factors that conclude property value; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information required.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance real estate, they legally own their appraisal report.
Reality: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document. However, home buyers have to be supplied with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it meets the requirements of their lending agency.
Reality: It is a very good idea for consumers to check over a copy of their appraisal so that they can double-check the accuracy of the report, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an excellent record for future reference, containing helpful and often-revealing data - 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 area.
Myth: Appraisers are hired only to estimate real estate property values in house sales involving mortgage-lending deals.
Reality: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: Appraisal reports have almost nothing in common with a home inspection report. The job of the appraiser is to find an opinion of value in the appraisal process and through producing the report. The purpose of a home inspector is to approximate the condition of the house and its main components, then compose a report on their findings.
