Myth: Assessed value should be the same as market value.
Reality: It is probable that Florida, like most states, validates the idea that the assessed value equates to 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 properties in the area have not been reassessed for an prolonged period of time.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the home will vary.
Reality: The appraiser has no personal interest in the outcome of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will mirror replacement cost.
Reality: Market value is based on what a willing buyer would likely pay a willing seller for a particular house, with neither being under pressure to buy or sell.
Replacement cost is the dollar amount necessary to rebuild a home in-kind.
Myth: Specific methods, like the price per square foot, are the ways appraisers use to arrive at the value of a home.
Reality: Appraisers complete a comprehensive analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: In a strong economy - when the values of homes in a given area are found to be rising by a particular percentage - the values of individual homes in the proximity can be expected to rise by that same percentage.
Reality: The appreciation of a certain house is always concluded on a case-by-case basis, factoring in data on comparable properties and other relevant elements.
It doesn't matter if the economy is on the rise or declining.
Myth: You can often tell what a home is worth simply by looking at the outside.
Reality: There are a number of different factors that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends.
An external inspection certainly can't provide all of the information needed.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their house, they legally own their appraisal.
Reality: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal report.
However, consumers must be given a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal report so long as it exceeds the necessities of their lending group.
Reality: A consumer should definitely look through their appraisal; there may be some questions or some worries with 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 appraisal report makes an invaluable record for future reference, filled with 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 vicinity.
Myth: The only reason someone would order an appraisal is if a property needs its value estimated in a lender-based sales transaction.
Reality: Depending upon their qualifications and designations, appraisers can and do perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: An appraisal report does not serve the same purpose as an inspection report.
The point of an appraisal report is to conclude upon an opinion of market value during the appraisal process and the completion of the appraisal.
House inspectors will produce a report that will determine the condition of the property and its major components and possible damage.
