Myth: Market value needs to be similar to the assessed value of the property.
Reality: It might be that Alabama, like most states, validates the common myth that the assessed value is no different from the market value; however, this is not always true.
Generally when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the area have not been reassessed for a good length of time, it may vary widely.
Myth: The appraised value of a house will change depending upon whether the appraisal is provided for the buyer or the seller.
Reality: The cost of the home does not affect the payment of the appraiser; as a result, the appraiser has no preconceived interest in the value of the home. This means that he will render job with impartiality and independence regardless of for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should equal the replacement cost of the home.
Reality: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house.
The dollar amount required to rebuild a property is what forms the replacement cost.
Myth: Specific methods, such as the price per square foot, are what appraisers use to determine the value of a home.
Reality: There are many differing calculations that an appraiser will use to make a comprehensive investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable properties.
Myth: When the economy is on the rise and the sales prices of homes are found to be increasing by a certain percentage, the other properties in the neighborhood can be expected to increase based on that same percentage.
Reality: All appreciation of value is on a one-on-one basis, concluded by data on relevant elements and the data of comparable properties.
This is true in excellent economic times as well as poor.
Myth: You can usually find what a home is worth simply by looking at the exterior.
Reality: To determine a conclusive value beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and current market trends.
Obviously, none of these factors can be found simply by inspecting the home from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their house, they own their appraisal.
Reality: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal.
Home buyers must be given a version of the report through request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the report so long as it meets the needs of their lending agency.
Reality: A home buyer should definitely inspect their appraisal report; there might be some questions or some concerns about the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can double as a record for the future, since it contains an incredible amount of information - 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: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and often do provide a lot of different 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.
Reality: Appraisal reports are definitely not the same as a home inspection.
The task of the appraiser is to form an opinion of value in the appraisal process and through writing the report.
A home inspector analyzes the condition of the property and its major components and reports these findings.
