Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Reality: It might be that Michigan, like most states, supports the idea that the assessed value equates to the market value; however, this is not often the case.
Examples include when interior remodeling has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.
Myth: The buyer or the seller will have an influence in the cost of the property depending upon for whom the appraiser is working.
Reality: There is no vested interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, regardless of for whom the appraisal is ordered.
Myth: The replacement value of the house will be on par with the market value.
Reality: The way market value is found is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any external party to buy or sell.
Replacement value is the dollar amount required to reconstruct a house in-kind.
Myth: Specific methods, such as the price per square foot of the property, are the ways appraisers use to determine the value of a house.
Reality: Appraisers complete a detailed 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 properties.
Myth: When the economy is on the rise and the sales prices of properties are reported to be appreciating by a certain percentage, the other homes in the neighborhood can be expected to rise based on that same percentage.
Reality: Any value an appraiser derives concerning a particular property is always personalized, based on certain factors concluded from the data of comparable houses and other specifications within the home itself.
This is true in robust economic times as well as poor.
Myth: The home's outside is determinate of the actual value of the home; it is unnecessary to do an interior appraisal.
Reality: House value is determined by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends.
An outside-only inspection obviously can't provide all of the information needed.
Myth: Since the consumer is the one who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: Legally, the document is owned by the lender unless the lender relinquishes their interest in the report.
However, home buyers must be provided with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal report so long as it meets the requirements of their lender.
Reality: Only when consumers check out a copy of their appraisal report can they verify 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 an incredible amount of data contained in an appraisal that can 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 proximity.
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 lending agency.
Reality: Hiring an appraiser 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 report is the same as a home inspection.
Reality: A home inspection report has a completely different purpose than an appraisal report.
An appraiser finds an opinion of value in the appraisal process and resulting appraisal.
House inspectors will write a report that will express the condition of the house and its major components and possible damage.
