Myth: The value that is assessed by the appraiser must be the same as the market value.
Reality: It might be that Colorado, like most states, supports the suggestion that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule.
Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the opinion of value of the home will vary.
Reality: There is no personal interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, regardless of for whom the appraisal is created.
Myth: Market value will equal replacement cost.
Reality: Market value is derived from what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under duress to buy or sell.
Replacement value is the dollar amount necessary to reconstruct a home in-kind.
Myth: Appraisers use a calculation, such as a certain price per square foot, to figure out 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 sale prices of comparable homes.
Myth: As homes increase in value by a certain percentage - in a robust economy - the houses around the appreciating properties are expected to appreciate by the same amount.
Reality: The appreciation of a certain home must be concluded on an individualized basis, factoring in data on comparable properties and other relevant specifications within the property itself.
This is true in robust economic times as well as poor.
Myth: You can usually tell what a home is worth simply by looking at the exterior.
Reality: There are a multitude of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends.
As you can see, none of these things can be found simply by inspecting the home from the outside.
Myth: Considering that the consumer is the party who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal.
Consumers have to be given a copy of the appraisal report through request as per the Equal Credit Opportunity Act.
Myth: There's no need for home buyers to even worry about what the report contains so long as their lending company is fine with the contents therein.
Reality: A consumer should definitely read through their appraisal report; there will probably be some questions or some worries about the accuracy of the inspection that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes an excellent record for future reference, filled with helpful and often-revealing information - including 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 home needs its value estimated in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no need to get an appraisal if you have had a home inspection.
Reality: A home inspection report has a completely different purpose than an appraisal report.
The reason behind an appraisal is to form an opinion of market value during the appraisal process and the completion of the appraisal.
The job of a home inspector is to approximate the condition of the home and its main components, then create a report on their inspection.