Myth: The value that is ascertained by the appraiser must be the same as the market value.
Reality: It could be that Tennessee, like most states, supports the suggestion that the assessed value equals the market value; however, this is sometimes the exception rather than the rule.
Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby homes are prime examples of why the price can vary.
Myth: The buyer or the seller may have an influence in the cost of the property depending upon for whom the appraiser is working.
Reality: The appraiser has no personal interest in the outcome of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is established, it should equal the replacement cost of the home.
Reality: Market value is acquired by what a willing buyer would likely pay a willing seller for a certain home, with neither being under pressure to buy or sell.
If the house were rebuilt, the dollar amount required to do so would form the replacement cost.
Myth: There are specific methods that real estate appraisers use to determine the value of a home, like the price per square foot.
Reality: Appraisers make an exhaustive analysis of all factors in consideration to the price of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: As homes increase their worth by a specific percentage - in a robust economy - the houses within the same neighborhood are figured to appreciate by the same amount.
Reality: Any value at which an appraiser concludes concerning a particular house is always individualized, based on certain factors derived from the data of comparable houses and other specifications within the property itself.
This is true in fair economic times as well as bad.
Myth: Just seeing what the house looks like on the outside gives an excellent idea of its cost.
Reality: There are a multitude of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from simply inspecting the property from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their house, they legally own their appraisal report.
Reality: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document.
Due the Equal Credit Opportunity Act, any consumer demanding a copy of the report must be provided with one by their lender.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the requirements of their lending agency.
Reality: Only when consumers 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.
An appraisal can serve as a record for the future, containing 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 vicinity.
Myth: Appraisals are ordered only to assess real estate property values in house sales involving mortgage-lending transactions.
Reality: Ordering an appraisal can fulfill a variety of requirements 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 is no different than a home inspection report.
Reality: Appraisal reports are definitely not the same as a home inspection.
An appraiser forms an opinion of value in the appraisal process and resulting report.
A home inspector assesses the condition of the building and its main components and reports these findings.