Myth: The value that is assessed by the appraiser is required to be equivalent to the market value.
Reality: It is possible that North Dakota, like most states, validates the suggestion that the assessed value is no different from the market value; however, this certainly varies based on state-to-state.
Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an extended period of time.
Myth: The opinion of value of a property will be different depending upon whether the appraisal is provided for the buyer or the seller.
Reality: The opinion of value of the house does not affect the pay of the appraiser; as such, the appraiser has no preconceived interest in the value of the property. What this means is he will provide services with impartiality and objectivity regardless of for whom the appraisal is conducted.
Myth: Market value will mirror replacement cost.
Reality: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under pressure to buy or sell.
If the property were reconstructed, the dollar amount needed to do so would make up the replacement cost.
Myth: There are certain methods that real estate appraisers use to show the opinion of value of a house, such as the price per square foot.
Reality: Appraisers make a full analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: As houses increase in value by a specific percentage - in a robust economy - the properties nearby are expected to increase by the same amount.
Reality: The appreciation of a certain house is always concluded on a case-by-case basis, factoring in information on comparable properties and other relevant specifications within the property itself.
It makes no difference if the economy is strong or terrible.
Myth: You can generally tell what a property is worth simply by looking at the exterior.
Reality: To find a genuine value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and market trends.
There's no possible way to get all of this data from just viewing the house from the exterior.
Myth: Because consumers fund appraisals when applying for loans to buy or refinance real estate, they legally own their appraisal report.
Reality: The document is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal.
Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with it by their lender.
Myth: Home buyers need not worry about what is in their appraisal document so long as it satisfies the necessities of their lending institution.
Reality: Only when consumers read a copy of their appraisal report can they double-check 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 report can serve as a record for the future, containing an incredible 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 proximity.
Myth: The only reason someone would hire an appraiser is if a house needs its value assessed in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and will perform a series of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is the same as a home inspection report.
Reality: An appraisal does not serve the same purpose as an inspection report.
The reason behind an appraisal is to conclude upon an opinion of market value during the appraisal process and the completion of the appraisal report.
The task of a home inspector is to determine the condition of the home and its main components, then write a report on these findings.