Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Reality: While most states support the suggestion that assessed value approximates estimated market value, this often is not the case.
Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended time.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the value of the home will vary.
Reality: The appraiser has no personal interest in the result of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the house.
Reality: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a house without being under duress from any outside party to buy or sell.
Replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: There are specific methods that real estate appraisers use to determine the value of a house, like the price per square foot.
Reality: An appraisal is a collection of data concluded from the home's size, location, proximity to undesirable facilities, the condition of the house and the values of recent comparable sales. You can count on CC Real Estate Services's appraisers to be professional in assessing this information.
Myth: In a robust economy - when the values of properties in a given neighborhood are reported to be increasing by a certain percentage - the prices of individual properties in the area can be expected to appreciate by that same percentage.
Reality: An increase in value of a certain house has to be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant considerations.
This is true in strong economic times as well as poor.
Myth: Just examining what the home looks like on its exterior gives an idea of its value.
Reality: To determine a solid value beyond all doubt, an appraiser must examine the house on a variety of factors based on area, condition, improvements, amenities, and current market trends.
There's no possible way to get all of this data from just inspecting the home from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their house, they own their appraisal report.
Reality: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the report.
Home buyers have to be given a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even care about what the appraisal report contains so long as their lending company is fine with the contents therein.
Reality: Only when consumers check out a copy of their appraisal report can they ensure 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 a valuable record for future reference, filled with 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 vicinity.
Myth: Appraisals are ordered only to estimate home values in home sales involving mortgage-lending deals.
Reality: Based upon their qualifications and designations, appraisers can and often do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: Appraisal reports are nothing like a home inspection.
The task of the appraiser is to come to an opinion of value in the appraisal process and through writing the report.
A home inspector determines the condition of the home and its major components and reports these findings.
