Myth: The value that is ascertained by the appraiser must be the same as the market value.
Reality: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended time.
Myth: The appraised value of a home will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement value of the property will be on par with the market value.
Reality: The way market value is found is based on what a home buyer would likely pay a willing seller for a home without being under duress from any outside party to buy or sell. If the property were reconstructed, the dollar amount necessary to do so would be the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the value of a property.
Reality: An appraisal is an amalgamation of data based on the house's size, location, proximity to some facilities, the condition of the property and the values of recent comparable sales. You can count on Sandcastle Management & Realty's staff to be forthright in assessing this information.
Myth: When the economy is doing well and the sales prices of properties are found to be appreciating by a certain percentage, the other houses in the proximity can be expected to appreciate based on that same percentage.
Reality: Any value an appraiser reports concerning a particular home is always individualized, based on certain factors concluded from the data of comparable houses and other considerations within the house itself. This is true in excellent economic times as well as bad.
Myth: You can generally see what a home is worth simply by looking at the exterior.
Reality: Home value is determined by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. An external inspection certainly can't provide all of the data required.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to purchase or refinance real estate, you own the provided appraisal report.
Reality: Legally, the appraisal report is owned by the lending company unless the lender relinquishes their interest in the appraisal. However, home buyers have to be given a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even worry about what the appraisal contains so long as their lender is fine with the contents therein.
Reality: A home buyer should definitely look through their appraisal report; there could be some questions or some worries about the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, as it contains a great deal of information - including, but certainly 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 proximity.
Myth: The only reason someone would order an appraisal is if a property needs its value assessed in a lender-based 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 variety 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: A home inspection report has a completely different purpose than an appraisal. An appraiser concludes on an opinion of value in the appraisal process and resulting document. A home inspector assesses the condition of the building and its major components and reports these findings.
