Myth: The value that is assessed by the appraiser will be equivalent to the market value.
Reality: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always.
Sometimes when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the Phoenix have not been reassessed for years or more, it may vary widely.
Myth: The value of a house will differ 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 appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will be the same as replacement cost.
Reality: Without any suggestion from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home.
The dollar amount needed to reconstruct a house is what forms the replacement cost.
Myth: There are certain methods that appraisers use to determine the value of a property, like the price per square foot.
Reality: Appraisers complete an exhaustive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: As houses increase in value by a certain percentage - in a strong economic state - the houses in proximity are figured to appreciate by the same amount.
Reality: All appreciation of value is on a case-by-case basis, found by information on relevant considerations and the data of comparable houses.
It doesn't matter if the economy is on the rise or declining.
Myth: You can often find what a property is worth simply by looking at the exterior.
Reality: Property value is determined by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends.
An outside-only 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 your home, you own the produced appraisal report.
Reality: Unless a lending agency releases its interest in the document, it is legally owned by the lending company that ordered the appraisal.
Due the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with one by their lending agency.
Myth: Consumers need not worry about what is in their document so long as it exceeds the necessities of their lending agency.
Reality: Only when home buyers look through a copy of their appraisal can they double-check its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a wealth of information contained in an appraisal that should be useful to the home buyer 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: The only reason someone would order an appraisal is if a property needs its value estimated in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and often do perform a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Reality: An appraisal does not fulfill the same purpose as an inspection report.
The task of the appraiser is to form an opinion of value in the appraisal process and through creating the report.
House inspectors will write a report that will show the condition of the property and its major components and possible damage.