Myth: Market value will be the same as the assessed value of the property.
Reality: It might be that Virginia, like most states, validates the common myth that the assessed value is the same as the market value; however, this certainly varies based on state-to-state.
Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The appraised value of a home will change depending upon whether the appraisal is produced for the buyer or the seller.
Reality: The appraiser has no vested interest in the result of the appraisal and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is determined, it should be the same as 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 an interested seller for a specific home.
The dollar amount needed to reconstruct a home is what forms the replacement cost.
Myth: Certain formulae, like the price per square foot, are what appraisers use to arrive at the value of a house.
Reality: There are many numerous ways that an appraiser will use to make an in-depth analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable homes.
Myth: In a powerful economy - when the values of houses in a given neighborhood are found to be appreciating by a particular percentage - the prices of individual properties in the proximity can be expected to increase by that same percentage.
Reality: The appreciation of a certain house is always determined on an individualized basis, factoring in information on comparable homes and other relevant elements.
This is true in good economic times as well as poor.
Myth: The house's outside is determinate of the expected price of the property; it is unnecessary to do an interior appraisal.
Reality: To conclude a solid value beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this data from just viewing the property from the outside.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance their house, they own their appraisal report.
Reality: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report.
Due the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be provided with one by their lending agency.
Myth: Consumers need not worry about what is in their report so long as it meets the requirements of their lending group.
Reality: A consumer should definitely read through their appraisal; there could be some questions or some concerns about the accuracy of the analysis 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, containing an exorbitant amount of information - including, but certainly 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending agency.
Reality: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal is no different than a home inspection report.
Reality: An appraisal does not fulfill the same purpose as an inspection.
The purpose of the appraiser is to come to an opinion of value in the appraisal process and through producing the report.
The point of a home inspector is to assess the condition of the house and its main components, then produce a report on these inspection.
