Myth: The value that is ascertained by the appraiser should be the same as 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.
Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby homes are exact examples of why this occurs.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the appraised value of the property will vary.
Reality: The appraiser has no personal interest in the result of the appraisal report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value should equate to replacement cost.
Reality: Market value is based on what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell.
If the house were reconstructed, the dollar amount necessary to do so would form the replacement cost.
Myth: Certain methods, such as the price per square foot of the property, are the ways appraisers use to come to the value of a property.
Reality: An appraisal is a collection of data concluded from the house's size, location, proximity to undesirable facilities, the condition of the property and the values of recent comparable sales. You can depend on Coleman Appraisal, LLC's staff to be honest in assessing this information.
Myth: In a powerful economy - when the sales prices of houses in a given region are found to be increasing by a particular percentage - the values of individual properties in the vicinity can be expected to appreciate by that same percentage.
Reality: Any value an appraiser derives in regards to a certain property is always individualized, based on certain factors derived from the data of comparable homes and other considerations within the home itself.
It doesn't matter if the economy is doing well or declining.
Myth: You can usually tell what a house is worth simply by looking at the exterior.
Reality: To determine a definite value beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends.
An exterior inspection obviously can't provide all of the data required.
Myth: Since the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Reality: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal.
Due the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with one by their lender.
Myth: There's no need for home buyers to even care about what the report contains so long as their lender is satisfied.
Reality: Only when home buyers check out a copy of their appraisal 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, filled with useful and often-revealing data - 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 proximity.
Myth: The only reason someone would hire an appraiser is if a property needs its value estimated in a lender-based sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: A home inspection report serves a completely different purpose than an appraisal.
An appraiser decides upon an opinion of value in the appraisal process and resulting document.
The job of a home inspector is to approximate the condition of the house and its main components, then compose a report on their findings.
