Myth: Assessed value should be the same as market value.
Reality: It could be that Florida, like most states, validates the idea that the assessed value is no different from the market value; however, this is not always true.
Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby properties are prime examples of why the price can vary.
Myth: The buyer or the seller may have impact in the cost of the house depending upon for whom the appraiser is working.
Reality: The appraised value of the home does not affect the pay of the appraiser; due to this, the appraiser has no pressured interest in the opinion of value of the house. Obviously, he will conduct job with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: Any time market value is established, it should match the replacement cost of the property.
Reality: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a house without being under pressure from any external group to buy or sell.
Replacement cost is the dollar amount necessary to rebuild a house in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to come to the value of a house.
Reality: There are many varied formulae that an appraiser will use to make a comprehensive analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable properties.
Myth: In a strong economy - when the prices of properties in a given area are found to be rising by a particular percentage - the prices of individual homes in the area can be expected to increase by that same percentage.
Reality: Any value an appraiser reports in regards to a specific home is always personalized, based on certain factors derived from the information of comparable houses and other specifications within the property itself.
It makes no difference whether the economy is excellent or terrible.
Myth: The home's exterior is determinate of the expected price of the home; it is unnecessary to do an interior inspection.
Reality: There are a multitude of different factors that conclude the value of a home; these factors include location, condition, improvements, amenities, and market trends.
There's no real way to get all of this data from just looking at the property from the outside.
Myth: Since the consumer is the person who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Reality: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that ordered the appraisal.
However, home buyers have to be supplied with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even worry about what the appraisal contains so long as their lending company is fine with the contents therein.
Reality: Only when consumers examine a copy of their report can they double-check its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can serve as a record for the future, since it contains a great deal 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 area.
Myth: The only reason someone would hire an appraiser is if a property needs its value estimated in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and will provide a variety of 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 report.
Reality: Appraisal reports have almost nothing in common with a home inspection.
The function of an appraisal is to arrive at an opinion of market value during the appraisal process and the production of the appraisal.
The purpose of a home inspector is to find the condition of the home and its major components, then create a report on their inspection.