Myth: Assessed value generally will equate market value.
Reality: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always.
Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby homes are excellent examples of why this occurs.
Myth: The buyer or the seller can have leverage in the value of the house depending upon for whom the appraiser is working.
Reality: The price of the property does not affect the payment of the appraiser; because of this, the appraiser has no personal interest in the price of the property. This means that he will complete his job with impartiality and independence regardless of for whom the appraisal is produced.
Myth: The replacement cost of the home will be on par with the market value.
Reality: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a house without being under influence from any external group to buy or sell.
The dollar amount necessary to reconstruct a home is what constitutes the replacement cost.
Myth: There are specific ways that appraisers use to find the cost of a house, such as the price per square foot.
Reality: An appraisal report is an assertion of data based on the house's size, location, proximity to specific facilities, the condition of the house and the values of recent comparable sales. You can count on KEY INSIGHT's appraisers to be forthright in assessing this data.
Myth: When the economy is doing well and the sales prices of homes are reported to be rising by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.
Reality: Any value an appraiser derives in regards to a certain property is always personalized, based on certain factors pulled from the data of comparable properties and other considerations within the home itself.
This is true in excellent economic times as well as bad.
Myth: The home's outside is determinate of the actual value of the house; it is unnecessary to do an interior inspection.
Reality: Property value is determined by a multitude of variables, including location, condition, improvements, amenities, and market trends.
An external inspection obviously can't provide all of the information required.
Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance their property, they own their appraisal report.
Reality: Legally, the appraisal report is owned by the lender unless the lender releases their interest in the report.
Home buyers have to be given a version of the report through request due to the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even care about what the appraisal report contains so long as their lending company is fine with the contents therein.
Reality: A consumer should definitely read through their appraisal report; there might be some questions or some worries about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can serve as a record for the future, containing an incredible amount 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending agency.
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: An appraisal report is no different than a home inspection report.
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 appraisal.
A home inspector determines the condition of the home and its main components and reports these findings.