Myth: Assessed value will always be equal to 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 remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.
Myth: The value of a home will change depending upon if the appraisal is conducted for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is created.
Myth: The replacement cost of the property is always in line with the market value.
Reality: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under influence from any external party to purchase or sell.
Replacement cost is the dollar amount needed to rebuild a property in-kind.
Myth: There are certain ways that appraisers use to determine the opinion of value of a property, like the price per square foot.
Reality: An appraisal is an amalgamation of data concluded from the home's size, location, proximity to certain facilities, the condition of the house and the values of recent comparable sales. You can depend on KLF Residential Appraisals's appraisers to be honest in assessing this information.
Myth: When the economy is doing well and the sales prices of homes are found to be appreciating by a certain percentage, the other homes in the area can be expected to appreciate based on that same percentage.
Reality: An increase in value of a certain home must be determined on an individualized basis, factoring in information on comparable houses and other relevant considerations.
It makes no difference if the economy is strong or poor.
Myth: You can generally find what a home is worth simply by looking at the outside.
Reality: To determine a definite value beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and current market trends.
An outside-only inspection obviously can't provide all of the data necessary.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their home, they own their appraisal report.
Reality: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that ordered the appraisal.
Consumers have to be given a copy of the report through request because of the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even concern themselves with what the appraisal contains so long as their lending agency is satisfied.
Reality: Only when consumers look over a copy of their report 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.
Also, the appraisal report makes a valuable record for future reference, comprised of helpful and often-revealing information - 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and will provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you get a home inspection.
Reality: Appraisal reports are nothing like a home inspection.
The reason behind an appraisal is to find an opinion of market value during the appraisal process and the completion of the appraisal.
House inspectors will write a report that will determine the condition of the home and its major components and possible damage.