Myth: Assessed value should always equate market value.
Reality: It could be that Oregon, like most states, validates the idea that the assessed value equals the market value; however, this is not often the case.
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 prolonged period of time.
Myth: The buyer or the seller can have leverage in the value of the home depending upon for whom the appraiser is working.
Reality: There is no personal interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the property.
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 specific property.
Replacement cost is the dollar amount needed to reconstruct a home in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to figure out the value of a house.
Reality: There are many different calculations that an appraiser will use to make an in-depth investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the values of recently sold comparable properties.
Myth: When the economy is strong and the sales prices of houses are reported to be appreciating by a certain percentage, the other houses in the area can be expected to increase based on that same percentage.
Reality: Any value an appraiser reports concerning a certain home is always personalized, based on certain factors found from the data of comparable houses and other considerations within the home itself.
This is true in excellent economic times as well as poor.
Myth: The property's outside is determinate of the expected price of the property; it is unnecessary to do an interior inspection.
Reality: House value is determined by a number of factors, including area, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from just viewing the house from the exterior.
Myth: Since the consumer is the one who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Reality: Legally, the report is owned by the lending agency unless the lender relinquishes their interest in the document.
However, home buyers have to be provided with a copy of the report upon written request, through the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even concern themselves with what the appraisal contains so long as their lending agency is satisfied.
Reality: A home buyer should definitely inspect their report; there could be some questions or some worries with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a great deal of information contained in a report that should be useful to the consumer 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a home during a sales transaction involving a lending company.
Reality: Depending upon their qualifications and designations, appraisers can and will perform a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Reality: Appraisal reports are definitely not the same as a home inspection report.
An appraiser finds an opinion of value in the appraisal process and resulting report.
The job of a home inspector is to assess the condition of the property and its major components, then provide a report on these findings.