Myth: Market value needs to be similar to the assessed value of the property.
Reality: It is possible that New York, like most states, supports the idea that the assessed value is the same as the market value; however, this is not always true. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller can have an influence in the cost of the home depending upon for whom the appraiser is working.
Reality: The appraiser has no personal interest in the outcome of the 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 equal the replacement cost of the property.
Reality: The way market value is found is based on what a buyer would likely pay a willing seller for a house without being under influence from any external party to buy or sell. The replacement cost is the dollar amount necessary to rebuild a property in-kind.
Myth: Specific methods, such as the price per square foot, are the ways appraisers use to come to the value of a property.
Reality: Appraisers make a comprehensive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: In a powerful economy - when the prices of homes in a given neighborhood are reported to be increasing by a certain percentage - the prices of individual homes in the area can be expected to appreciate by that same percentage.
Reality: All appreciation of value is on a case-by-case basis, determined by information on relevant conditions and the data of comparable homes. It doesn't matter if the economy is doing well or declining.
Myth: The house's exterior is determinate of the expected price of the property; there is no need to do an interior inspection.
Reality: There are a multitude of different factors that show the value of a home; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just viewing the house from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance their home, they legally own their appraisal.
Reality: Legally, the appraisal is owned by the lending company unless the lender relinquishes their interest in the document. By the Equal Credit Opportunity Act, any consumer asking for a copy of the appraisal report must be provided with one by their lending agency.
Myth: It doesn't concern consumers what's in the report so long as it meets the necessities of their lending agency.
Reality: Only when consumers read a copy of their 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. An report can serve as a record for the future, since it contains an exorbitant amount of information - including, but certainly 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: 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: Depending upon their qualifications and designations, appraisers can and may provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection report.
Reality: A home inspection report has a completely different purpose than an appraisal report. The point of an appraisal is to find an opinion of market value during the appraisal process and the production of the appraisal report. The job of a home inspector is to assess the condition of the property and its major components, then produce a report on these inspection.