Myth: Assessed value generally will equate market value.
Reality: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby houses are exact examples of why there might be a differential in price.
Myth: The buyer or the seller will have leverage in the cost of the property depending upon for whom the appraiser is working.
Reality: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, no matter of for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
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 group to buy or sell. If the house were rebuilt, the dollar amount required to do so would be the replacement cost.
Myth: Specific formulae, such as the price per square foot, are the ways appraisers use to determine the value of a house.
Reality: An appraisal report is a collection of information concluded from the property's size, location, proximity to some facilities, the condition of the house and the values of recent comparable sales. You can count on Anderson & Associates's staff to be honest in assessing this data.
Myth: In a powerful economy - when the values of homes in a given county are found to be increasing by a particular percentage - the prices of individual houses in the proximity can be expected to rise by that same percentage.
Reality: All increase of value is on an individual basis, concluded by data on relevant elements and the data of comparable properties. It makes no difference whether the economy is powerful or bad.
Myth: You can usually see what a property is worth simply by looking at the exterior.
Reality: Property value is concluded by a multitude of factors, including location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by examining the house from the outside.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance their property, they legally own their appraisal report.
Reality: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. Under the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be provided with it by their lender.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the necessities of their lending agency.
Reality: Only when consumers examine a copy of their appraisal can they verify its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in a report that could be useful to the consumer in the future, such as 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 home sales involving mortgage-lending transactions.
Reality: Depending upon their qualifications and designations, appraisers can and often do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not serve the same purpose as an inspection report. The reason behind an appraisal is to arrive at an opinion of market value during the appraisal process and the production of the appraisal. House inspectors will create a report that will express the condition of the property and its major components and possible damage.
