Myth: Market value should be the same as the assessed value of the property.
Reality: It could be that North Carolina, like most states, supports the suggestion that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule.
Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an extended period of time.
Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the opinion of value of the property will vary.
Reality: There is no personal interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is conducted.
Myth: Any time market value is determined, it should equal the replacement cost of the home.
Reality: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular property.
If the house were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the value of a property.
Reality: Appraisers make a detailed analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: When the economy is doing well and the sales prices of properties are reported to be rising by a certain percentage, the other houses in the area can be expected to appreciate based on that same percentage.
Reality: The appreciation of a certain house must be determined on a case-by-case basis, factoring in information on comparable properties and other relevant specifications within the house itself.
It doesn't matter if the economy is on the rise or declining.
Myth: Just examining what the home looks like on its exterior gives a good idea of its value.
Reality: There are a multitude of different variables that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends.
Obviously, none of these things can be derived simply by inspecting the house from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to purchase or refinance your home, you own the ordered appraisal report.
Reality: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that ordered the appraisal.
Consumers have to be supplied with a version of the report through request due to the Equal Credit Opportunity Act.
Myth: Consumers need not care about what is in their appraisal so long as it exceeds the requirements of their lending agency.
Reality: A home buyer should definitely read through their report; there could be some questions or some concerns about the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes a near perfect record for future reference, comprised of helpful and often-revealing data - 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 area.
Myth: The only reason someone would order an appraisal is if a house needs its value estimated in a lender-based sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and will perform a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection report.
Reality: An appraisal report does not fulfill the same purpose as an inspection.
The reason behind an appraisal report is to find an opinion of market value during the appraisal process and the production of the appraisal.
House inspectors will write a report that will express the condition of the house and its major components and possible damage.