Myth: Market value should be the same as the assessed value of the property.
Reality: It could be that Michigan, like most states, supports the idea that the assessed value equates to the market value; however, this is not always true.
Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the area have not been reassessed for an extended time.
Myth: Depending on whether the appraisal is done for the buyer or the seller, the appraised value of the house will vary.
Reality: There is no vested 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 written.
Myth: Market value should equal replacement cost.
Reality: The way market value is found is based on what a home buyer would likely pay a willing seller for a home without being under influence from any external party to purchase or sell.
If the home were rebuilt, the dollar amount necessary to do so would make up the replacement cost.
Myth: There are specific methods that appraisers use to determine the value of a property, like the price per square foot.
Reality: An appraisal is a collection 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 AccuRight Appraisals's staff to be professional in assessing this data.
Myth: As houses appreciate by a certain percentage - in a strong economy - the homes around the appreciating properties are figured to appreciate by the same amount.
Reality: The appreciation of a specific home has to be determined on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the home itself.
This is true in excellent economic times as well as poor.
Myth: You can often see what a home is worth simply by looking at the exterior.
Reality: House value is concluded by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
An external inspection obviously can't provide all of the data required.
Myth: Because the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Reality: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal.
Because of the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given one by their lender.
Myth: It doesn't matter to consumers what's in the report so long as it satisfies the necessities of their lending agency.
Reality: Only when home buyers check out 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 appraisal can serve as a record for the future, as 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: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender-based sales transaction.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a series 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: A home inspection serves the same purpose as an appraisal.
Reality: Appraisal reports are completely different than a home inspection report.
The reason behind an appraisal is to arrive at an opinion of market value during the appraisal process and the completion of the appraisal report.
The task of a home inspector is to find the condition of the property and its major components, then write a report on their findings.
