Myth: An appraisal is the same as a home inspection.
Reality: An appraisal does not serve the same purpose as an inspection. The appraiser forms an opinion of the value in the appraisal process and resulting report. A home inspector determines the condition
of the home and its major components and reports these findings.
Myth: When consumers pay for an appraisal when applying for loans to purchase or refinance real estate, they own the appraisal.
Reality: The appraisal is legally owned by the lender - unless the lender "releases its interest" in the document. However, consumers must be given a copy of the appraisal report from the lender.
Myth: Appraisers use a formula, such as specific price per square foot, to figure out the value of a home.
Reality: Appraisers make a detailed analysis of all factors pertaining to the value of a home including its location, condition, size, proximity to facilities and recent sale prices of comparable
Myth: When the sale prices of homes in a given area are reported to be rising by a particular percentage - the value of individual properties in the area can be expected to
appreciate by that same percentage.
Reality: Value appreciation of a specific property must be determined on an individualized basis, factoring in data on comparable properties and other relevant considerations.
Myth: Consumers should not be concerned with what is in the appraisal document so long as it satisfies the needs of their lending institution.
Reality: Only if consumers read a copy of their appraisal can they double-check its accuracy and question the result. Also, it makes a valuable record for the future reference, containing useful and
often-revealing information. This information may include the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood and neighborhood
description of current real-estate activity and market trends in the vicinity.
Myth: The appraised value of a property will vary, depending upon whether the appraisal is conducted for the buyer or the seller.
Reality: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Assessed value should equate to market value.
Reality: While most states support the concept that assessed value approximate estimated market value, this often is not the case. Examples include when interior remodeling has occurred and the assessor
is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period.