Myth: The value that is assessed by the appraiser will be the same as the market value.
Reality: It is probable that Kentucky, like most states, validates the suggestion that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby properties are exact examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is provided for the buyer or the seller, the cost of the house will vary.
Reality: The opinion of value of the property does not affect the payment of the appraiser; because of this, the appraiser has no personal interest in the opinion of value of the home. This means that he will conduct task with impartiality and independence regardless of for whom the appraisal is created.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the property.
Reality: The way market value is found is based on what a buyer would likely pay a willing seller for a house without being under pressure from any outside group to purchase or sell. The replacement cost is the dollar amount required to reconstruct a house in-kind.
Myth: Appraisers use a formula, like a certain price per square foot, to conclude the value of a house.
Reality: There are many numerous calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable homes.
Myth: In a strong economy - when the values of homes in a given region are reported to be appreciating by a certain percentage - the values of individual homes in the area can be expected to increase by that same percentage.
Reality: All increase of value is on an individual basis, determined by information on relevant considerations and the data of comparable houses. It doesn't matter if the economy is doing well or declining.
Myth: You can commonly see what a home is worth simply by looking at the exterior.
Reality: Property value is determined by a multitude of variables, including location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just inspecting the home from the outside.
Myth: Considering that the consumer is the person who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: Legally, the report is owned by the lender unless the lender relinquishes their interest in the report. Home buyers have to be provided with a copy of the appraisal report through request because of the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even worry about what the appraisal contains so long as their lending institution is satisfied.
Reality: Only when consumers check out a copy of their appraisal report can they ensure 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 double as a record for the future, as it contains an exorbitant 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 area.
Myth: The only reason someone would order an appraisal is if a property needs its value estimated in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and often do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't have to get an appraisal if you have had a home inspection.
Reality: A home inspection serves a completely different purpose than an appraisal report. The purpose of an appraisal report is to conclude upon an opinion of market value during the appraisal process and the completion of the report. The task of a home inspector is to approximate the condition of the home and its major components, then create a report on their inspection.
