Myth: Market value should be the same as the assessed value of the property.
Reality: It could be that North Carolina, like most states, supports the common myth that the assessed value is the same as the market value; however, this is not often the case.
Generally when interior remodeling has occurred and the assessor is has not investigated the improvement or other homes in the neighborhood have not been reassessed for a good length of time, it may vary widely.
Myth: The appraised value of a house will vary depending upon if the appraisal is produced for the buyer or the seller.
Reality: The appraiser has no personal interest in the result of the appraisal report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should equate to replacement cost.
Reality: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a certain house, with neither being under duress to buy or sell.
The dollar amount demanded to rebuild a house is what forms the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the value of a house.
Reality: There are many differing methods that an appraiser will use to make a comprehensive analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the sales prices of recently sold comparable houses.
Myth: In a strong economy - when the sales prices of homes in a given region are found to be appreciating by a particular percentage - the prices of individual homes in the vicinity can be expected to increase by that same percentage.
Reality: All increase of value is on a one-on-one basis, concluded by information on relevant considerations and the data of comparable homes.
It makes no difference whether the economy is powerful or poor.
Myth: Just examining what the house looks like on the outside gives an excellent idea of its value.
Reality: House value is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
An external inspection obviously can't provide all of the information needed.
Myth: Since the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Reality: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal report.
However, home buyers must be given a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even care about what the appraisal contains so long as their lending agency is satisfied.
Reality: A home buyer should definitely read through their document; there will probably be some questions or some worries with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can double as a record for the future, containing an exorbitant amount of data - including, but 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 home needs its value estimated in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can perform a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no need to get an appraisal if you order a home inspection.
Reality: Appraisal reports are completely different than a home inspection report.
The appraiser decides upon an opinion of value in the appraisal process and resulting appraisal report.
House inspectors will compose a report that will explain the condition of the property and its major components and possible damage.