Myth: The value that is ascertained by the appraiser must be the same as the market value.
Reality: It could be that Michigan, like most states, validates the common myth that the assessed value is no different from the market value; however, this is not often the case.
Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby homes are prime examples of why the price can vary.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the appraised value of the house will vary.
Reality: The appraiser has no personal interest in the outcome of the report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement value of the house will be on par with the market value.
Reality: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property.
If the property were reconstructed, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to come to the value of a home.
Reality: An appraisal is an assertion of data based on the property's size, location, proximity to certain facilities, the condition of the property and the values of recent comparable sales. You can depend on GED Appraisal's staff to be forthright in assessing this information.
Myth: In a robust economy - when the sales prices of houses in a given neighborhood are found to be increasing by a particular percentage - the values of individual houses in the vicinity can be expected to rise by that same percentage.
Reality: The appreciation of a certain house is always determined on a case-by-case basis, factoring in information on comparable homes and other relevant considerations.
It doesn't matter if the economy is doing well or declining.
Myth: Just examining what the house looks like on its exterior gives an excellent idea of its value.
Reality: There are a number of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends.
An external inspection certainly can't provide all of the information required.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance real estate, they own their appraisal.
Reality: Legally, the report is owned by the lender unless the lender releases their interest in the document.
Home buyers must be supplied with a copy of the report through request as per the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even worry about what the report contains so long as their lending institution is fine with the contents therein.
Reality: It is almost imperative for home buyers to go through a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a wealth of data contained in an appraisal report that could be useful to the home buyer in the future, such as 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: Appraisers are hired only to assess home values in home sales involving mortgage-lending deals.
Reality: Based upon their qualifications and designations, appraisers can and may provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not fulfill the same purpose as an inspection.
The function of an appraisal is to conclude upon an opinion of market value during the appraisal process and the production of the appraisal.
House inspectors will compose a report that will explain the condition of the property and its major components and possible damage.
