Myth: Market value will always be the same as the assessed value of the property.
Reality: This is not often the case; most states do support the suggestion 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 properties in the area have not been reassessed for quite a while, it may vary widely.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the cost of the home will vary.
Reality: There is no vested interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is conducted.
Myth: The replacement value of the house should be on par with the market value.
Reality: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property.
The dollar amount necessary to reconstruct a property is what forms the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to figure out the value of a house.
Reality: An appraisal report is an assertion of data concluded from the property's size, location, proximity to certain facilities, the condition of the house and the values of recent comparable sales. You can rely on Peak Appraising's appraisers to be professional in assessing this data.
Myth: In a robust economy - when the values of properties in a given area are reported to be rising by a particular percentage - the values of individual houses in the proximity can be expected to rise by that same percentage.
Reality: An increase in value of a specific home must be concluded on an individualized basis, factoring in data on comparable houses and other relevant specifications within the home itself.
This is true in robust economic times as well as bad.
Myth: Just examining what the property looks like on the outside gives an excellent idea of its value.
Reality: To conclude a conclusive value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and market trends.
Obviously, none of these things can be derived just by examining the home from the outside.
Myth: Because consumers fund the appraisal 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 lender - unless the lender "relinquishes its interest" in the appraisal.
Consumers must be supplied with a copy of the document through request as per the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even concern themselves with what the appraisal contains so long as their lending agency is fine with the contents therein.
Reality: A consumer should definitely read through their document; there might be some questions or some worries with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can serve as a record for the future, since it contains an exorbitant amount of information - 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a house during a sales transaction involving a lending institution.
Reality: Appraisers can have many different qualifications and designations which allow them to perform a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection report.
Reality: A home inspection report serves a completely different purpose than an appraisal.
The purpose of the appraiser is to find an opinion of value in the appraisal process and through writing the report.
House inspectors will write a report that will express the condition of the house and its major components and possible damage.