Myth: The value that is assessed by the appraiser must be the same as the market value.
Reality: It is probable that Arkansas, like most states, supports the suggestion that the assessed value equals the market value; however, this is not always true.
Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby houses are perfect examples of why the price can vary.
Myth: The opinion of value of a property will differ depending upon if the appraisal is ordered for the buyer or the seller.
Reality: The value of the home does not affect the salary of the appraiser; as such, the appraiser has no vested interest in the value of the house. What this means is he will complete his services with impartiality and objectivity regardless of for whom the appraisal is provided.
Myth: The replacement value of the house will be on par with the market value.
Reality: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home.
The dollar amount necessary to rebuild a house is what constitutes the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to come to the value of a property.
Reality: There are many differing ways that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the values of recently sold comparable properties.
Myth: When the economy is on the rise and the sales prices of homes are found to be appreciating by a certain percentage, the other houses in the neighborhood can be expected to increase based on that same percentage.
Reality: Any value an appraiser derives in regards to a certain property is always individualized, based on certain factors found from the data of comparable properties and other specifications within the home itself.
This is true in excellent economic times as well as bad.
Myth: The house's outside is determinate of the expected price of the property; there is no need to do an interior inspection.
Reality: House value is concluded by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends.
Obviously, none of these factors can be derived simply by examining the house from the exterior.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance their property, they own their appraisal report.
Reality: Unless a lender releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal.
Due the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given one by their lender.
Myth: It doesn't mean anything to consumers what's in the report so long as it satisfies the necessities of their lending company.
Reality: A home buyer should definitely inspect their report; there could be some questions or some concerns about the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the report makes an invaluable record for future reference, comprised of useful and often-revealing data - 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a home during a sales transaction involving a lender.
Reality: Hiring an appraiser can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't have to get an appraisal if you order a home inspection.
Reality: A home inspection serves a completely different purpose than an appraisal.
An appraiser concludes on an opinion of value in the appraisal process and resulting report.
House inspectors will write a report that will show the condition of the home and its major components and possible damage.
