Myth: The value that is ascertained by the appraiser should be exactly the same as the 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.
Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an prolonged time.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the cost of the home will vary.
Reality: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is created.
Myth: The replacement value of the home is always in line with the market value.
Reality: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property.
If the home were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to arrive at the value of a home.
Reality: An appraisal is a collection of information 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 Young Appraisal Company, Inc.'s staff to be forthright in assessing this data.
Myth: As homes increase in value by a specific percentage - in a strong economy - the properties in proximity are expected to appreciate by the same amount.
Reality: An increase in value of a specific house must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant elements.
This is true in robust economic times as well as bad.
Myth: Just examining what the property looks like on its exterior gives an idea of its value.
Reality: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends.
There's no real way to get all of this data from simply examining the house from the exterior.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their property, they legally own their appraisal.
Reality: Unless a lender releases its interest in the report, it is legally owned by the lending agency that ordered the appraisal.
However, consumers must be given a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their document so long as it exceeds the needs of their lending institution.
Reality: A consumer should definitely read through their appraisal; there will probably be some questions or some concerns about the accuracy of the analysis that must be addressed. 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, comprised of useful and often-revealing 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 area.
Myth: The only reason someone would order an appraisal is if a home needs its value assessed in a lender sales transaction.
Reality: Hiring an appraiser 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 report is no different than a home inspection.
Reality: An appraisal does not fulfill the same purpose as an inspection.
The purpose of the appraiser is to form an opinion of value in the appraisal process and through producing the report.
A home inspector assesses the condition of the property and its major components and reports their findings.
