Myth: Market value needs to be the same as the assessed value of the property.
Reality: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always.
Usually when interior remodeling has been done and the assessor is not aware of the improvement or other houses in the Southampton have not been reassessed for quite a while, it may vary widely.
Myth: The opinion of value of a property will differ depending upon if the appraisal is provided for the buyer or the seller.
Reality: The opinion of value of the property does not affect the payment of the appraiser; because of this, the appraiser has no vested interest in the opinion of value of the house. Obviously, he will complete his services with impartiality and objectivity regardless of for whom the appraisal is provided.
Myth: Any time market value is calculated, it should match the replacement cost of the property.
Reality: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house.
The dollar amount required to rebuild a house is what constitutes the replacement cost.
Myth: There are specific ways that real estate appraisers use to determine the cost of a property, like the price per square foot.
Reality: There are many varied formulae that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable houses.
Myth: In a powerful economy - when the sales prices of properties in a given area are found to be increasing by a certain percentage - the values of individual homes in the proximity can be expected to rise by that same percentage.
Reality: Any value an appraiser reports concerning a particular home is always personalized, based on certain factors derived from the information of comparable homes and other considerations within the property itself.
It makes no difference whether the economy is good or bad.
Myth: The home's exterior is determinate of the expected price of the house; it is unnecessary to do an interior appraisal.
Reality: There are a number of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends.
Obviously, none of these things can be derived just by looking at the home from the outside.
Myth: Because the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document.
By the Equal Credit Opportunity Act, any home buyer demanding a copy of the report must be given one by their lending agency.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the needs of their lender.
Reality: Only when consumers read a copy of their report 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.
An report can double as a record for the future, containing an incredible amount of information - 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 area.
Myth: The only reason someone would order an appraisal is if a home needs its value assessed in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and often do perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection report.
An appraiser forms an opinion of value in the appraisal process and resulting document.
The point of a home inspector is to find the condition of the home and its main components, then provide a report on their findings.