Myth: Assessed value should always be equal to market value.
Reality: It might be that Tennessee, like most states, supports the suggestion that the assessed value equals the market value; however, this is sometimes the exception rather than the rule.
Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are exact examples of why there might be a differential in price.
Myth: The value of a house will vary depending upon if the appraisal is conducted for the buyer or the seller.
Reality: There is no real interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is created.
Myth: Any time market value is calculated, it should match the replacement cost of the house.
Reality: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property.
Replacement cost is the dollar amount necessary to rebuild a property in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to conclude the value of a home.
Reality: Appraisers make an exhaustive analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: In a robust economy - when the values of houses in a given neighborhood are reported to be appreciating by a certain percentage - the prices of individual homes in the area can be expected to increase by that same percentage.
Reality: Any value an appraiser reports concerning a particular house is always personalized, based on certain factors concluded from the information of comparable properties and other specifications within the house itself.
This is true in good economic times as well as poor.
Myth: You can usually tell what a home is worth simply by looking at the outside.
Reality: To determine a genuine value beyond all doubt, an appraiser must inspect the home on a variety of factors based on location, condition, improvements, amenities, and current market trends.
An external inspection obviously can't provide all of the data required.
Myth: Considering that the consumer is the person who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Reality: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the appraisal.
However, consumers have to be provided with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even worry about what the report contains so long as their lending institution is satisfied.
Reality: It is a very good idea for consumers to check over a copy of their report so that they can double-check the accuracy of the report, in case it's required to question its accuracy. 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, containing an incredible amount of data - 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 proximity.
Myth: Appraisals are ordered only to estimate building values in house sales involving mortgage-lending deals.
Reality: Based upon their qualifications and designations, appraisers can and may provide a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you get a home inspection.
Reality: An appraisal report does not fulfill the same purpose as an inspection.
The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report.
A home inspector analyzes the condition of the building and its main components and reports these findings.
