|
|
Myth #1: Assessed Value Should Equal Market Value Reality: While most states support the concept that assessed value approximate estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period. Myth #2: The appraised value of a property will vary depending upon whether the appraisal is put together for the buyer or the seller. Reality: The appraiser has no vested interest in the outcome of the appraisal and should render services with autonomy, impartiality and fairness – no matter whether the appraisal is conducted for the buyer or the seller. Myth #3: Market value should be close in value to the replacement cost. Reality: Market value is based on what a willing buyer would likely pay a willing seller for a particular property, without being under pressure to buy or sell. Replacement cost is the dollar amount required to reconstruct the property at a particular point in time. Myth #4: Appraisers have a formula they use to figure out the value of a home, such as a specific price per square foot. Reality: Appraisers create a detailed analysis of all factors dealing with the value of a home, including its: location, condition, size, proximity to facilities and recent sale prices of comparable properties. Myth #5: In a robust economy – when the sales prices of homes in a given area are reported to be rising by a particular percentage - the value of individual properties in that same area can be expected to appreciate by that same percentage. Reality: Value appreciation of a specific property must be determined on an individualized basis, and not on the area as a whole. However, appraisers do factor in data on comparable properties and other relevant “value” considerations. This valuation appreciation process is true in good times as well as bad. Myth #6: In general, a person can tell what a property is worth simply by looking at the outside. Reality: Property value cannot be determined simply by looking at the outside, but rather is determined by a number of factors, including: location, condition, improvements, amenities, and market trends. Myth #7: Since consumers are required to pay for an appraisal when applying for a loan to purchase or refinance real estate, they own their appraisal. Reality: When an appraisal is required by a lender, the lender usually owns the appraisal unless the lender "releases its interest" in the document. Regardless, consumers must be given a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act. Myth #8: Consumers should not be concerned with what appears within their appraisal report so long as it satisfies the needs of their lending institution. Reality: This is completely wrong. Consumers must read a copy of their appraisal report so that they can double-check its accuracy and question the results. Also, it makes a valuable record for future reference since it contains useful and often-revealing information, 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 vicinity. Myth #9: Appraisers only estimate residential real estate property values in mortgage-lending transactions where property is being bought, sold or transferred. Reality: Depending upon an appraiser’s qualifications and designations, appraisers can provide a variety of services, including: advice for estate planning, dispute resolution, zoning & tax assessment review and cost/benefit analysis. Myth #10: An appraisal and a home inspection are the same thing. Reality: An appraisal is not the same as a home inspection. An appraisal is solely a documented opinion of value; whereas, a home inspection reports on the condition of the home and its major components. |
||
|
|
 |
||
|
|
|||