Myth: Assessed value will always equate market value.
Reality: It could be that California, like most states, supports the common myth that the assessed value equates to the market value; however, this certainly varies based on state-to-state.
Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby houses are perfect examples of why this occurs.
Myth: The buyer or the seller may have leverage in the cost of the property depending upon for whom the appraiser is working.
Reality: The appraiser has no vested interest in the result of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value should equal replacement cost.
Reality: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any external group to purchase or sell.
The dollar amount needed to rebuild a home is what forms the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the value of a house.
Reality: An appraisal is an amalgamation of information concluded from the house's size, location, proximity to some facilities, the condition of the house and the values of recent comparable sales. You can depend on Mike Retzloff Appraisal Service's appraisers to be professional in assessing this data.
Myth: As houses appreciate by a certain percentage - in a strong economy - the homes within the same neighborhood are expected to increase by the same amount.
Reality: Any value an appraiser derives concerning a particular house is always personalized, based on certain factors found from the data of comparable houses and other specifications within the house itself.
This is true in strong economic times as well as bad.
Myth: Just seeing what the home looks like on the outside gives a good idea of its value.
Reality: Property value is determined by a number of factors, including area, condition, improvements, amenities, and market trends.
Obviously, none of these things can be found just by looking at the property from the outside.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their home, they legally own their appraisal report.
Reality: Legally, the report is owned by the lending agency unless the lender releases their interest in the appraisal.
Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be given one by their lending agency.
Myth: There's no reason for consumers to even concern themselves with what the appraisal report contains so long as their lending institution is fine with the contents therein.
Reality: A home buyer should definitely inspect their appraisal; there might be some questions or some concerns about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can double as a record for the future, containing an incredible amount of data - 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 area.
Myth: Appraisals are ordered only to estimate building values in property sales involving mortgage-lending transactions.
Reality: Depending upon their qualifications and designations, appraisers can and may provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection report.
Reality: Appraisal reports are definitely not the same as a home inspection.
The point of an appraisal report is to form an opinion of market value during the appraisal process and the completion of the report.
House inspectors will create a report that will show the condition of the property and its major components and possible damage.