Myth: The value that is assessed by the appraiser is required to be equivalent to the market value.
Reality: It is possible that Michigan, like most states, validates the suggestion that the assessed value is the same as the market value; however, this is not often the case.
Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are excellent examples of why the price can vary.
Myth: The appraised value of a home will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Reality: The opinion of value of the property does not affect the salary of the appraiser; as a result, the appraiser has no preconceived interest in the price of the property. Obviously, he will conduct job with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: The replacement value of the house should be on par with the market value.
Reality: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under duress to buy or sell.
If the home were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to arrive at the value of a home.
Reality: Appraisers make a comprehensive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: In a powerful economy - when the values of properties in a given county are found to be increasing by a particular percentage - the values of individual houses in the proximity can be expected to appreciate by that same percentage.
Reality: All increase of value is on a one-on-one basis, concluded by information on relevant elements and the data of comparable homes.
It makes no difference if the economy is good or poor.
Myth: Just seeing what the property looks like on its exterior gives a good idea of its value.
Reality: There are a number of different factors that show the value of a home; these factors include area, condition, improvements, amenities, and market trends.
Obviously, none of these factors can be derived just by viewing the home from the outside.
Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your home, you own the ordered appraisal report.
Reality: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that ordered the appraisal.
By the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be given one by their lending company.
Myth: There's no reason for home buyers to even worry about what the report contains so long as their lending agency is fine with the contents therein.
Reality: A home buyer should definitely look through their appraisal; there might be some questions or some concerns with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of data contained in an appraisal report that will probably 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 vicinity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a house during a sales transaction involving a lender.
Reality: Ordering an appraisal can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not serve the same purpose as an inspection report.
The point of an appraisal report is to find an opinion of market value during the appraisal process and the production of the appraisal.
House inspectors will create a report that will explain the condition of the property and its major components and possible damage.