Myth: Market value should be the same as the assessed value of the property.
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.
At times when interior remodeling has been done and the assessor is not aware of the improvement or properties in the area have not been reassessed for years or more, it may vary widely.
Myth: The buyer or the seller sometimes may have an influence in the value of the house depending upon for whom the appraiser is working.
Reality: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is written.
Myth: The replacement value of the property will be on par with the market value.
Reality: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under duress to buy or sell.
If the home were rebuilt, the dollar amount needed to do so would set the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the value of a property.
Reality: An appraisal is a collection of data concluded from the property's size, location, proximity to specific facilities, the condition of the house and the values of recent comparable sales. You can count on REID E. CHOATE & ASSOCIATES, LLC's appraisers to be ethical in assessing this information.
Myth: When the economy is robust and the sales prices of homes are found to be increasing by a certain percentage, the other homes in the proximity can be expected to rise based on that same percentage.
Reality: All increase of value is on an individual basis, concluded by information on relevant considerations and the data of comparable houses.
It makes no difference if the economy is powerful or on the decline.
Myth: Just looking at what the property looks like on the outside gives a good idea of its value.
Reality: To conclude a genuine value beyond all doubt, an appraiser must assess the home on a variety of factors based on area, condition, improvements, amenities, and current market trends.
An outside-only inspection certainly can't provide all of the data necessary.
Myth: Since you're the one providing the money for the appraisal report when applying for the loan to buy or refinance your home, you own the provided appraisal.
Reality: Legally, the appraisal report is owned by the lender unless the lender releases their interest in the appraisal.
Under the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with it by their lender.
Myth: There's no need for consumers to even concern themselves with what the report contains so long as their lending company is satisfied.
Reality: It is almost imperative for home buyers to read a copy of their appraisal so that they can verify the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can serve as a record for the future, as it contains an exorbitant amount of data - including, but certainly 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: Appraisals are ordered only to estimate real estate property values in house sales involving mortgage-lending transactions.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: An appraisal does not fulfill the same purpose as an inspection report.
An appraiser finds an opinion of value in the appraisal process and resulting appraisal report.
House inspectors will produce a report that will show the condition of the home and its major components and possible damage.
