Myth: Market value needs to be the same as the assessed value of the property.
Reality: While most states support the suggestion that assessed value approximates estimated market value, this usually is not the case.
Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an prolonged time.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the appraised value of the home will vary.
Reality: The cost of the house does not affect the pay of the appraiser; because of this, the appraiser has no personal interest in the value of the property. This means that he will render services with impartiality and objectivity regardless of for whom the appraisal is produced.
Myth: Market value will mirror replacement cost.
Reality: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a property without being under influence from any external party to purchase or sell.
If the property were reconstructed, the dollar amount necessary to do so would set the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to conclude the value of a property.
Reality: An appraisal report is an amalgamation 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 depend on American Realty Appraisals, LLC's staff to be ethical in assessing this data.
Myth: As homes increase in value by a certain percentage - in a strong economic state - the homes around the appreciating properties are figured to increase by the same amount.
Reality: An increase in value of a specific property has to be concluded on a case-by-case basis, factoring in data on comparable homes and other relevant elements.
This is true in robust economic times as well as poor.
Myth: The home's outside is determinate of the actual value of the house; there is no need to do an interior inspection.
Reality: Home value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from simply inspecting the home from the outside.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for your loan to buy or refinance real estate, you own the produced appraisal report.
Reality: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the document.
Consumers must be provided with a copy of the appraisal report through request because of the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal document so long as it meets the needs of their lending company.
Reality: It is almost imperative for consumers to go through a copy of their appraisal so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the report makes a near perfect record for future reference, containing useful and often-revealing data - 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: Appraisers are hired only to estimate building values in home sales involving mortgage-lending transactions.
Reality: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is no different than a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection.
An appraiser decides upon an opinion of value in the appraisal process and resulting appraisal.
House inspectors will create a report that will determine the condition of the property and its major components and possible damage.
