Myth: Assessed value will always be the same as market value.
Reality: It is possible that New York, like most states, supports the common myth that the assessed value equates to the market value; however, this is not often the case.
Often when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for a good length of time, it may vary widely.
Myth: The buyer or the seller may have leverage in the value of the home depending upon for whom the appraiser is working.
Reality: The price of the property does not affect the salary of the appraiser; as a result, the appraiser has no personal interest in the price of the home. Obviously, he will complete his services 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: Market value is based on what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under undue influence to buy or sell.
If the property were reconstructed, the dollar amount necessary to do so would be the replacement cost.
Myth: There are certain ways that appraisers use to find the opinion of value of a house, such as the price per square foot.
Reality: Appraisers make a comprehensive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: As houses appreciate by a certain percentage - in a robust economy - the houses in proximity are figured to increase by the same amount.
Reality: Any value an appraiser reports in regards to a specific home is always individualized, based on certain factors derived from the information of comparable properties and other considerations within the home itself.
This is true in excellent economic times as well as bad.
Myth: The home's outside is determinate of the expected price of the house; there is no need to do an interior appraisal.
Reality: There are a multitude of different variables that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from just inspecting the home from the outside.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their home, they own their appraisal.
Reality: Legally, the document is owned by the lending company unless the lender releases their interest in the report.
However, home buyers must be given a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their report so long as it meets the necessities of their lending company.
Reality: It is a very good idea for home buyers to check over a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the report makes an excellent record for future reference, containing useful and often-revealing data - 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 hire an appraiser unless you are trying to get an estimate of the value of a home during a sales transaction involving a lending company.
Reality: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection report.
Reality: An appraisal does not fulfill the same purpose as an inspection.
The function of an appraisal report is to form an opinion of market value during the appraisal process and the production of the appraisal.
The purpose of a home inspector is to approximate the condition of the property and its major components, then produce a report on their findings.
