Myth: The value that is ascertained by the appraiser must be equivalent to the market value.
Reality: It is possible that California, like most states, validates the suggestion that the assessed value equals the market value; however, this certainly varies based on state-to-state.
Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby properties are prime examples of why the price can vary.
Myth: Depending on if the appraisal is done for the buyer or the seller, the value of the property will vary.
Reality: The cost of the property does not affect the pay of the appraiser; due to this, the appraiser has no personal interest in the price of the home. Obviously, he will conduct task with impartiality and objectivity regardless of for whom the appraisal is produced.
Myth: Any time market value is determined, it should match the replacement cost of the home.
Reality: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home.
If the house were rebuilt, the dollar amount required to do so would set the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to figure out the value of a house.
Reality: There are many differing ways that an appraiser will use to make a detailed analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable houses.
Myth: As houses increase in value by a specific percentage - in a strong economic state - the homes in proximity are expected to increase by the same amount.
Reality: Any value an appraiser reports concerning a certain home is always personalized, based on certain factors pulled from the data of comparable properties and other considerations within the house itself.
This is true in good economic times as well as bad.
Myth: You can often see what a property is worth simply by looking at the outside.
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.
An exterior inspection obviously can't provide all of the data needed.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their home, they legally own their appraisal report.
Reality: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that purchased the appraisal.
However, home buyers have to be supplied with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their document so long as it satisfies the requirements of their lending agency.
Reality: A home buyer should definitely read through their report; there could be some questions or some concerns with the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the report makes an invaluable record for future reference, containing helpful 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: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lender.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a series of different services including - but certainly 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 get a home inspection.
Reality: A home inspection serves a completely different purpose than an appraisal.
The task of the appraiser is to come to an opinion of value in the appraisal process and through producing the report.
The point of a home inspector is to determine the condition of the property and its main components, then provide a report on their conclusions.
