Myth: Assessed value generally will equate market value.
Reality: While most states back the concept that assessed value is equal to estimated market value, this often is not the case. At times when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the neighborhood have not been reassessed for a good length of time, it may vary widely.
Myth: The buyer or the seller may have impact in the value of the property depending upon for whom the appraiser is working.
Reality: The appraiser has no personal interest in the outcome of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is determined, it should match the replacement cost of the house.
Reality: The way market value is derived is based on what a buyer would likely pay a willing seller for a home without being under influence from any external group to buy or sell. The replacement cost is the dollar amount needed to rebuild a house in-kind.
Myth: Specific formulae, such as the price per square foot of the property, are the ways appraisers use to arrive at the value of a house.
Reality: An appraisal report is a collection of information based on the property's size, location, proximity to specific facilities, the condition of the property and the values of recent comparable sales. You can rely on Boivin Appraisals, Inc.'s appraisers to be ethical in assessing this information.
Myth: When the economy is robust and the sales prices of houses are reported to be appreciating by a certain percentage, the other homes in the neighborhood can be expected to increase based on that same percentage.
Reality: An increase in value of a specific house is always determined on an individualized basis, factoring in data on comparable homes and other relevant specifications within the property itself. This is true in excellent economic times as well as poor.
Myth: You can commonly find what a home is worth simply by looking at the outside.
Reality: Home value is concluded by a multitude of variables, including area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the information needed.
Myth: Considering that the consumer is the party who provides the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Reality: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. However, consumers have to be given a copy of the appraisal report upon written request, due to the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their appraisal report so long as it exceeds the needs of their lending institution.
Reality: It is almost imperative for home buyers to read a copy of their appraisal so that they can double-check the accuracy of the document, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, containing useful and often-revealing information - 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 area.
Myth: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender sales transaction.
Reality: Ordering an appraisal can fulfill a variety of needs 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 house inspection serves the same purpose as an appraisal.
Reality: An appraisal does not fulfill the same purpose as an inspection report. The point of an appraisal is to conclude upon an opinion of market value during the appraisal process and the completion of the report. A home inspector determines the condition of the house and its main components and reports these findings.
