Myth: Assessed value generally will be the same as market value.
Reality: While most states support the concept that assessed value is the same as estimated market value, this generally is not the case.
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 extended time.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the appraised value of the property will vary.
Reality: The appraiser has no personal interest in the outcome of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is determined, it should be the same as the replacement cost of the property.
Reality: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home.
Replacement cost is the dollar amount required to rebuild a home in-kind.
Myth: There are certain methods that appraisers use to find the opinion of value of a property, like the price per square foot.
Reality: An appraisal report is a collection of information based on the property's size, location, proximity to some facilities, the condition of the property and the values of recent comparable sales. You can count on Reeder Appraisal Services, LLC's appraisers to be forthright in assessing this data.
Myth: As houses increase in value by a certain percentage - in a strong economic state - the houses around the appreciating properties are expected to increase by the same amount.
Reality: Any value an appraiser reports concerning a certain house is always personalized, based on certain factors found from the information of comparable properties and other specifications within the home itself.
This is true in excellent economic times as well as poor.
Myth: Just looking at what the house looks like on the outside gives an idea of its value.
Reality: There are a number of different factors that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends.
As you can see, none of these factors can be derived just by inspecting the home from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance your home, you own the produced appraisal.
Reality: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the report.
Due the Equal Credit Opportunity Act, any consumer demanding a copy of the document must be provided with it by their lending company.
Myth: Home buyers need not be concerned with what is in their appraisal report so long as it meets the needs of their lending agency.
Reality: A home buyer should definitely inspect their report; there will probably be some questions or some worries with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of information contained in an appraisal report that can 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a house during a sales transaction involving a lender.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: A home inspection has a completely different purpose than an appraisal.
The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report.
The point of a home inspector is to find the condition of the house and its major components, then produce a report on these inspection.