Myth: Assessed value should equate market value.
Reality: While most states support the concept that assessed value approximates estimated market value, this often is not the case. Sometimes when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the Carlsbad have not been reassessed for quite a while, it may vary widely.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the appraised value of the property will vary.
Reality: The cost of the house does not affect the pay of the appraiser; as such, the appraiser has no personal interest in the price of the home. What this means is he will provide business with impartiality and independence regardless of for whom the appraisal is produced.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the home.
Reality: Market value is derived from what a willing buyer would likely pay a willing seller for a specific property, with neither being under pressure to buy or sell. The dollar amount required to rebuild a house is what forms the replacement cost.
Myth: There are specific ways that real estate appraisers use to show the opinion of value of a house, such as the price per square foot.
Reality: There are many varied calculations that an appraiser will use to make a comprehensive investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the values of recently sold comparable properties.
Myth: When the economy is doing well and the sales prices of houses are reported to be rising by a certain percentage, the other homes in the area can be expected to appreciate based on that same percentage.
Reality: All appreciation of value is on a case-by-case basis, concluded by data on relevant elements and the data of comparable houses. This is true in excellent economic times as well as bad.
Myth: Just seeing what the property looks like on its exterior gives a good idea of its value.
Reality: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the property from the exterior.
Myth: Because the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Reality: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be provided with it by their lender.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the necessities of their lender.
Reality: A home buyer should definitely inspect their document; there will probably be some questions or some worries about the accuracy of the analysis that should be addressed. 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, as it contains an exorbitant 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 order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending company.
Reality: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. House inspectors will write a report that will show the condition of the property and its major components and possible damage.