Myth: Market value should be the same as the assessed value of the property.
Reality: It might be that Pennsylvania, like most states, validates the suggestion that the assessed value equals the market value; however, this certainly varies based on state-to-state.
Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby properties are exact examples of why there might be a differential in price.
Myth: The opinion of value of a property will vary depending upon if the appraisal is provided for the buyer or the seller.
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 created.
Myth: Market value should equate to replacement cost.
Reality: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a house without being under pressure from any outside party to buy or sell.
The dollar amount needed to reconstruct a house is what constitutes the replacement cost.
Myth: Certain methods, like the price per square foot of the property, are the ways appraisers use to ascertain the value of a house.
Reality: There are many differing methods that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the sales prices 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 properties in the proximity can be expected to appreciate based on that same percentage.
Reality: All increase of value is on a case-by-case basis, concluded by data on relevant elements and the data of comparable homes.
It makes no difference whether the economy is excellent or on the decline.
Myth: You can often tell what a property is worth simply by looking at the outside.
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.
There's no real way to get all of this data from just looking at the house from the exterior.
Myth: Since you're the one funding for the appraisal when applying for your loan to buy or refinance your house, you own the ordered appraisal.
Reality: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the document.
Home buyers have to be supplied with a version of the report through request due to the Equal Credit Opportunity Act.
Myth: There's no reason for consumers to even worry about what the appraisal report contains so long as their lending agency is fine with the contents therein.
Reality: Only when home buyers look over a copy of their report can they ensure its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of data stored in a report that can be useful to the home buyer 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 vicinity.
Myth: The only reason someone would order an appraisal is if a home needs its value estimated in a lender-based sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and do perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: A home inspection report serves a completely different purpose than an appraisal.
The task of the appraiser is to find an opinion of value in the appraisal process and through writing the report.
House inspectors will compose a report that will express the condition of the home and its major components and possible damage.