Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Reality: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always.
Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby houses are exact examples of why the price can vary.
Myth: The value of a property will be different depending upon if the appraisal is conducted for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is conducted.
Myth: Market value will equal replacement cost.
Reality: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a house without being under pressure from any external group to purchase or sell.
Replacement cost is the dollar amount needed to rebuild a house in-kind.
Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the value of a house.
Reality: An appraisal is a collection of information based on the house's size, location, proximity to undesirable facilities, the condition of the house and the values of recent comparable sales. You can count on Spencer Appraisal, Inc.'s appraisers to be honest in assessing this information.
Myth: When the economy is robust and the sales prices of homes are reported to be rising by a certain percentage, the other houses in the proximity can be expected to rise based on that same percentage.
Reality: Any value an appraiser reports in regards to a certain home is always personalized, based on certain factors pulled from the data of comparable properties and other considerations within the house itself.
This is true in excellent economic times as well as bad.
Myth: You can generally tell what a house is worth simply by looking at the outside.
Reality: Home value is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends.
An exterior inspection obviously can't provide all of the data necessary.
Myth: Since you're the one providing the money for the appraisal report when applying for your loan to purchase or refinance your home, you own the produced appraisal report.
Reality: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that ordered the appraisal.
However, home buyers have to be given a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their document so long as it exceeds the necessities of their lending agency.
Reality: Only when home buyers check out a copy of their report can they ensure 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 report makes an excellent record for future reference, filled with useful and often-revealing information - including, but 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: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending agency.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform 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: An appraisal is no different than a home inspection.
Reality: An appraisal report 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 produce a report that will show the condition of the home and its major components and possible damage.
