Myth: Market value should be similar to the assessed value of the property.
Reality: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always.
Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an prolonged time.
Myth: The buyer or the seller will have impact in the value of the home depending upon for whom the appraiser is working.
Reality: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is ordered.
Myth: Market value should mirror replacement cost.
Reality: Without any pressure from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific house.
The replacement cost is the dollar amount needed to rebuild a house in-kind.
Myth: Appraisers use a calculation, such as a specific price per square foot, to come to the value of a home.
Reality: An appraisal report is an assertion of information based on the property's size, location, proximity to specific facilities, the condition of the home and the values of recent comparable sales. You can rely on Ralph Martin & Associates, Inc.'s appraisers to be ethical in assessing this data.
Myth: When the economy is doing well and the sales prices of homes are found to be rising by a certain percentage, the other properties in the neighborhood can be expected to appreciate based on that same percentage.
Reality: Any value an appraiser reports concerning a particular house is always personalized, based on certain factors derived from the information of comparable homes and other specifications within the property itself.
It makes no difference if the economy is powerful or terrible.
Myth: The home's exterior is determinate of the actual value of the property; there is no need to do an interior appraisal.
Reality: Property value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
An external inspection definitely can't provide all of the information necessary.
Myth: Since the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Reality: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the appraisal.
However, consumers have to be provided with a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it satisfies the requirements of their lending agency.
Reality: Only when consumers examine a copy of their appraisal 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 wealth of data stored in an appraisal 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 proximity.
Myth: The only reason someone would hire an appraiser is if a property needs its value estimated in a lender sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and do provide a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Reality: An appraisal does not serve the same purpose as an inspection report.
The reason behind an appraisal report is to arrive at an opinion of market value during the appraisal process and the production of the appraisal report.
House inspectors will produce a report that will express the condition of the home and its major components and possible damage.
