Myth: Market value will be similar to the assessed value of the property.
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 remodeling has happened and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended period of time.
Myth: The opinion of value of a property will change depending upon whether the appraisal is produced for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should be the same as replacement cost.
Reality: Market value is based on what a willing buyer would likely pay a willing seller for a specific property, with neither being under duress to buy or sell. If the property were reconstructed, the dollar amount required to do so would make up the replacement cost.
Myth: There are specific ways that real estate appraisers use to find the cost of a house, like the price per square foot.
Reality: An appraisal report is an amalgamation 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 JD North & Associates's appraisers to be honest in assessing this information.
Myth: In a robust economy - when the values of homes in a given region are reported to be increasing by a certain percentage - the prices of individual properties in the vicinity can be expected to increase by that same percentage.
Reality: The appreciation of a certain home is always concluded on an individualized basis, factoring in data on comparable homes and other relevant elements. It makes no difference if the economy is strong or on the decline.
Myth: You can generally find what a house is worth simply by looking at the outside.
Reality: There are a number of different variables that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just viewing the house from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance real estate, they legally own their appraisal.
Reality: Unless a lender releases its interest in the report, it is legally owned by the lending agency that purchased the appraisal. However, home buyers have to be provided with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their report so long as it exceeds the requirements of their lending company.
Reality: It is very important for home buyers to peruse a copy of their appraisal report so that they can verify the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal report that can 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 region.
Myth: Appraisals are ordered only to estimate real estate property values in home sales involving mortgage-lending deals.
Reality: Depending upon their qualifications and designations, appraisers can and will provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you get a home inspection.
Reality: A home inspection has a completely different purpose than an appraisal report. The function of an appraisal report is to conclude upon an opinion of market value during the appraisal process and the production of the appraisal. House inspectors will produce a report that will determine the condition of the home and its major components and possible damage.
