Myth: Market value needs to be the same as the assessed value of the property.
Reality: It is possible that Alabama, like most states, supports the common myth that the assessed value equals the market value; however, this certainly varies based on state-to-state.
Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby homes are excellent examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the cost of the home will vary.
Reality: The cost of the house does not affect the salary of the appraiser; due to this, the appraiser has no pressured interest in the value of the property. Obviously, he will provide job with impartiality and independence regardless of for whom the appraisal is produced.
Myth: The replacement cost of the property is always in line with the market value.
Reality: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property.
The dollar amount demanded to rebuild a property is what forms the replacement cost.
Myth: There are specific ways that appraisers use to find the opinion of value of a property, such as the price per square foot.
Reality: Appraisers make a full analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: In a robust economy - when the values of houses in a given area are reported to be increasing by a certain percentage - the prices of individual homes in the proximity can be expected to rise by that same percentage.
Reality: The appreciation of a specific home must be determined on an individualized basis, factoring in data on comparable houses and other relevant considerations.
It makes no difference if the economy is strong or bad.
Myth: Just examining what the property looks like on the outside gives a good idea of its value.
Reality: To conclude an accurate value beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and market trends.
An exterior inspection obviously can't provide all of the data necessary.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their house, they own their appraisal report.
Reality: Legally, the appraisal report is owned by the lending agency unless the lender releases their interest in the report.
Consumers must be given a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even care about what the appraisal report contains so long as their lending agency is fine with the contents therein.
Reality: It is a very good idea for consumers to go through a copy of their appraisal report so that they can verify the accuracy of the document, in case there is a need to question its accuracy. 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 certainly 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a house during a sales transaction involving a lending institution.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection.
Reality: An appraisal report does not serve the same purpose as an inspection report.
An appraiser forms an opinion of value in the appraisal process and resulting report.
The point of a home inspector is to approximate the condition of the property and its major components, then compose a report on their findings.