Myth: The value that is ascertained by the appraiser should be the same as the market value.
Reality: It might be that Iowa, like most states, validates the idea that the assessed value equals the market value; however, this is not always true.
Generally when interior remodeling has been done and the assessor is not aware of the improvement or properties in the neighborhood have not been reassessed for quite some time, it may vary widely.
Myth: The appraised value of a home will differ depending upon whether the appraisal is ordered for the buyer or the seller.
Reality: There is no personal interest on the part of the appraiser in the result of the appraisal report, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is created.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Reality: Market value is based on what a willing buyer would likely pay a willing seller for a certain property, with neither being under undue influence to buy or sell.
Replacement cost is the dollar amount required to rebuild a house in-kind.
Myth: Certain formulae, like the price per square foot, are what appraisers use to ascertain the value of a property.
Reality: Appraisers complete a detailed analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: In a powerful economy - when the sales prices of houses in a given county are reported to be increasing by a certain percentage - the prices of individual homes in the vicinity can be expected to appreciate by that same percentage.
Reality: All increase of value is on a one-on-one basis, found by data on relevant elements and the data of comparable houses.
It doesn't matter if the economy is on the rise or declining.
Myth: You can usually find what a property is worth simply by looking at the exterior.
Reality: To conclude a genuine value beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends.
Obviously, none of these things can be derived simply by examining the house from the outside.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance real estate, they own their appraisal.
Reality: Legally, the report is owned by the lending agency unless the lender relinquishes their interest in the document.
However, consumers must be provided with a copy of the document upon written request, through the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even care about what the report contains so long as their lending institution is satisfied.
Reality: A consumer should definitely inspect their report; there might be some questions or some worries with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can double as a record for the future, since it contains an incredible 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 vicinity.
Myth: Appraisals are ordered only to assess house values in house sales involving mortgage-lending transactions.
Reality: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Reality: Appraisal reports are completely different than a home inspection.
The point of an appraisal is to find an opinion of market value during the appraisal process and the production of the appraisal report.
House inspectors will produce a report that will express the condition of the house and its major components and possible damage.