Myth: Market value should be the same as the assessed value of the property.
Reality: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby homes are exact examples of why the price can vary.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.
Reality: There is no vested 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: Market value should be the same as replacement cost.
Reality: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular house, with neither being under pressure to buy or sell. If the house were rebuilt, the dollar amount necessary to do so would form the replacement cost.
Myth: Certain methods, such as the price per square foot of the property, are what appraisers use to arrive at the value of a home.
Reality: An appraisal is an assertion of data based on the home's size, location, proximity to specific facilities, the condition of the house and the values of recent comparable sales. You can count on Lisa Barefoot Appraisal Services LLC's staff to be forthright in assessing this information.
Myth: In a robust economy - when the sales prices of homes in a given area are reported to be increasing by a particular percentage - the values of individual properties in the vicinity can be expected to appreciate by that same percentage.
Reality: Any value an appraiser reports concerning a particular house is always personalized, based on certain factors concluded from the information of comparable properties and other considerations within the house itself. It doesn't matter if the economy is doing well or declining.
Myth: Just seeing what the home looks like on its exterior gives a good idea of its value.
Reality: Property value is determined by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just looking at 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.
Reality: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. Home buyers must be supplied with a copy of the appraisal report upon written request as per the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal document so long as it meets the necessities of their lending group.
Reality: It is almost imperative for consumers to read a copy of their appraisal so that they can verify the accuracy of the document, in case there is a need to question its accuracy. 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 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: Appraisers are hired only to estimate house values in house sales involving mortgage-lending deals.
Reality: Ordering an appraisal can fulfill a variety of requirements 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: There's no need to get an appraisal if you have had a home inspection.
Reality: A home inspection has a completely different purpose than an appraisal report. The appraiser finds an opinion of value in the appraisal process and resulting appraisal. A home inspector analyzes the condition of the house and its main components and reports their findings.