Myth: The value that is ascertained by the appraiser is required to be exactly the same as the market value.
Reality: While most states back the concept that assessed value is the same as estimated market value, this commonly is not the case. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period.
Myth: The buyer or the seller may have impact in the value of the home depending upon for whom the appraiser is working.
Reality: There is no real interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the house.
Reality: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement cost is the dollar amount necessary to rebuild a home in-kind.
Myth: Specific formulae, like the price per square foot of the property, are the ways appraisers use to ascertain the value of a property.
Reality: An appraisal report is an assertion of information based on the property's size, location, proximity to some facilities, the condition of the home and the values of recent comparable sales. You can count on Dexter Appraisal Services's appraisers to be professional in assessing this data.
Myth: When the economy is doing well and the sales prices of houses are reported to be appreciating by a certain percentage, the other homes in the neighborhood can be expected to increase based on that same percentage.
Reality: An increase in value of a specific house must be concluded on an individualized basis, factoring in information on comparable homes and other relevant specifications within the home itself. It doesn't matter if the economy is on the rise or declining.
Myth: Just seeing what the home looks like on its exterior gives an idea of its value.
Reality: Home value is concluded by a number of factors, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply viewing the house from the outside.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their home, they own their appraisal.
Reality: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be provided with one by their lending agency.
Myth: There's no point for home buyers to even concern themselves with what the report contains so long as their lending institution 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 with the accuracy of the inspection that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, filled with useful and often-revealing information - including 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: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending institution.
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 the same as a home inspection.
Reality: A home inspection serves a completely different purpose than an appraisal. The point of an appraisal is to conclude upon an opinion of market value during the appraisal process and the production of the report. House inspectors will write a report that will express the condition of the home and its major components and possible damage.