Myth: Market value should be equivocal to the assessed value of the property.
Reality: It is possible that Florida, like most states, validates the common myth that the assessed value is the same as the market value; however, this certainly varies based on state-to-state.
Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are excellent examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the appraised value of the house will vary.
Reality: There is no vested interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is written.
Myth: Market value should equate to replacement cost.
Reality: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a specific home.
If the property were reconstructed, the dollar amount necessary to do so would set the replacement cost.
Myth: There are certain ways that real estate appraisers use to determine the opinion of value of a property, such as the price per square foot.
Reality: Appraisers make a detailed analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: In a powerful economy - when the values of homes in a given neighborhood are reported to be rising by a certain percentage - the values of individual properties in the area can be expected to increase by that same percentage.
Reality: The appreciation of a specific home must be determined on an individualized basis, factoring in information on comparable properties and other relevant specifications within the house itself.
It doesn't matter if the economy is on the rise or declining.
Myth: The house's exterior is determinate of the actual value of the property; it is unnecessary to do an interior appraisal.
Reality: To determine an accurate value beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends.
An exterior inspection definitely can't provide all of the data necessary.
Myth: Since the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Reality: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal.
However, consumers must be given a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the appraisal contains so long as their lending agency is satisfied.
Reality: A home buyer should definitely read through their report; there could be some questions or some worries with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can double as a record for the future, containing an incredible amount of information - 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending institution.
Reality: Depending upon their qualifications and designations, appraisers can and often do provide a multitude of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is the same as a home inspection.
Reality: A home inspection serves a completely different purpose than an appraisal.
The purpose of the appraiser is to find an opinion of value in the appraisal process and through creating the report.
The point of a home inspector is to determine the condition of the home and its main components, then create a report on their conclusions.
