Myth: Market value will be equivocal to the assessed value of the property.
Reality: While most states uphold the concept that assessed value is equal to estimated market value, this usually is not the case.
Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are exact examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the value of the house will vary.
Reality: The opinion of value of the property does not affect the salary of the appraiser; as such, the appraiser has no preconceived interest in the price of the property. What this means is he will conduct services with impartiality and objectivity regardless of for whom the appraisal is produced.
Myth: Market value will mirror replacement cost.
Reality: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home.
Replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: Specific methods, like the price per square foot, are what appraisers use to determine the value of a property.
Reality: An appraisal is an amalgamation of information based on the house's size, location, proximity to certain facilities, the condition of the house and the values of recent comparable sales. You can count on Andel Appraisals's staff to be forthright in assessing this data.
Myth: In a powerful economy - when the values of houses in a given area are found to be rising by a certain percentage - the prices of individual homes in the area can be expected to appreciate by that same percentage.
Reality: The appreciation of a specific house must be concluded on a case-by-case basis, factoring in data on comparable homes and other relevant specifications within the house itself.
This is true in robust economic times as well as bad.
Myth: You can often tell what a house is worth simply by looking at the outside.
Reality: To determine a solid value beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends.
As you can see, none of these factors can be derived simply by inspecting the house from the outside.
Myth: Since the consumer is the party who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Reality: Legally, the document is owned by the lending company unless the lender relinquishes their interest in the document.
However, consumers must be given a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even worry about what the report contains so long as their lender is satisfied.
Reality: Only when consumers read a copy of their appraisal can they double-check its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes an invaluable record for future reference, filled with helpful 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: The only reason someone would order an appraisal is if a property needs its value estimated in a lender-based sales transaction.
Reality: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: An appraisal does not serve the same purpose as an inspection report.
An appraiser decides upon an opinion of value in the appraisal process and resulting report.
A home inspector determines the condition of the property and its main components and reports their findings.