Myth: The value that is ascertained by the appraiser should be the same as the market value.
Reality: It could be that Wisconsin, like most states, supports the suggestion that the assessed value is no different from the market value; however, this certainly varies based on state-to-state.
Examples include when interior reconstruction has happened and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended period.
Myth: The buyer or the seller sometimes 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 result of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is determined, it should match the replacement cost of the house.
Reality: Market value is acquired by what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell.
The dollar amount required to rebuild a property is what forms the replacement cost.
Myth: Specific formulae, like the price per square foot, are the ways appraisers use to ascertain the value of a house.
Reality: Appraisers complete 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 properties.
Myth: As homes appreciate by a certain percentage - in a robust economic state - the properties nearby are expected to appreciate by the same amount.
Reality: An increase in value of a specific home must be concluded on an individualized basis, factoring in data on comparable houses and other relevant specifications within the property itself.
It makes no difference whether the economy is excellent or terrible.
Myth: Just looking at what the house looks like on its exterior gives a good idea of its value.
Reality: There are a number of different factors that conclude property value; these factors include location, condition, improvements, amenities, and market trends.
As you can see, none of these factors can be derived just by looking at the property from the exterior.
Myth: Because 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 belongs to them.
Reality: Unless a lending agency releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal.
Home buyers have to be provided with a version of the document through request because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the requirements of their lending company.
Reality: A consumer should definitely look through their appraisal; there will probably be some questions or some worries about 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.
An report can serve as a record for the future, as it contains an exorbitant amount of 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lender.
Reality: Based upon their qualifications and designations, appraisers can and may provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not serve the same purpose as an inspection.
An appraiser forms an opinion of value in the appraisal process and resulting appraisal report.
A home inspector determines the condition of the house and its major components and reports their findings.
