Myth: Market value needs to be equivocal to the assessed value of the property.
Reality: It is probable that North Carolina, like most states, validates the suggestion that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule.
Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby houses are perfect examples of why this occurs.
Myth: The appraised value of a home will differ depending upon whether the appraisal is produced for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is written.
Myth: Market value should equate to replacement cost.
Reality: Market value is based on what a willing buyer would likely pay a willing seller for a certain property, with neither being under undue influence to buy or sell.
If the home were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: There are specific ways that appraisers use to determine the cost of a home, such as the price per square foot.
Reality: There are many different formulae that an appraiser will use to make a comprehensive analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable properties.
Myth: As houses increase in value by a certain percentage - in a strong economic state - the homes in proximity are figured to increase by the same amount.
Reality: Any value an appraiser reports in regards to a particular home is always personalized, based on certain factors pulled from the information of comparable houses and other specifications within the house itself.
This is true in robust economic times as well as bad.
Myth: Just examining what the property looks like on the outside gives a good idea of its value.
Reality: To determine a conclusive value beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and current market trends.
An outside-only inspection obviously can't provide all of the data required.
Myth: Because the consumer is the one who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal report belongs to them.
Reality: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal.
Under the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be given it by their lending agency.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the necessities of their lending company.
Reality: Only when home buyers examine a copy of their appraisal can they double-check 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 information contained in an appraisal report that could 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 region.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending agency.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a series of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal does not fulfill the same purpose as an inspection.
The task of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report.
The job of a home inspector is to assess the condition of the property and its main components, then produce a report on their findings.