Myth: Market value has to be similar to the assessed value of the property.
Reality: While most states support the concept that assessed value equates estimated market value, this usually is not the case. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The buyer or the seller can have impact in the value of the house depending upon for whom the appraiser is working.
Reality: The value of the house does not affect the salary of the appraiser; as such, the appraiser has no preconceived interest in the value of the house. Obviously, he will render job with impartiality and independence regardless of for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Reality: The way market value is derived is based on what a home buyer would likely pay a willing seller for a house without being under pressure from any outside group to purchase or sell. If the property were reconstructed, the dollar amount necessary to do so would form the replacement cost.
Myth: Appraisers use a formula, such as a certain price per square foot, to come to the value of a property.
Reality: An appraisal is an assertion of information based on the home's size, location, proximity to undesirable facilities, the condition of the house and the values of recent comparable sales. You can count on Miller Appraisal Services, LLC's staff to be honest in assessing this data.
Myth: When the economy is strong and the sales prices of houses are found to be rising by a certain percentage, the other homes in the proximity can be expected to increase based on that same percentage.
Reality: All increase of value is on a case-by-case basis, found by information on relevant elements and the data of comparable houses. This is true in good economic times as well as bad.
Myth: You can usually find what a home is worth simply by looking at the outside.
Reality: There are a multitude of different variables that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by looking at the property from the outside.
Myth: Since the consumer is the one who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Reality: The appraisal is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the report. Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be given it by their lending company.
Myth: Consumers need not be concerned with what is in their appraisal report so long as it satisfies the needs of their lending company.
Reality: It is very important for consumers to read a copy of their report so that they can double-check the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an appraisal report that can be useful to the consumer 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: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending agency.
Reality: Based upon their qualifications and designations, appraisers can and often do provide a series 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 have had a home inspection.
Reality: Appraisal reports are definitely not the same as a home inspection. The point of an appraisal 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 express the condition of the property and its major components and possible damage.
