Myth: Assessed value should always be similar to market value.
Reality: This is not often the case; Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are exact examples of why the price can vary.
Myth: The value of a home will change depending upon if the appraisal is produced for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the appraisal and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value should equate to replacement cost.
Reality: The way market value is found is based on what a home buyer would likely pay a willing seller for a home without being under influence from any outside party to purchase or sell. Replacement value is the dollar amount needed to reconstruct a property in-kind.
Myth: Specific methods, such as the price per square foot of the property, are the methods appraisers use to ascertain the worth of a house.
Reality: An appraisal is a collection of data concluded from the house's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can count on Lower Mainland Appraisal Services Ltd.'s staff to be honest in assessing this data.
Myth: In a robust economy - when the costs of homes in a given region are found to be rising by a certain percentage - the worth of individual properties in the proximity can be expected to rise by that same percentage.
Reality: Any worth at which an appraiser arrives concerning a certain home is always personalized, based on certain factors pulled from the information of comparable houses and other considerations within the house itself. It doesn't matter if the economy is doing well or declining.
Myth: You can usually see what a property is worth simply by looking at the exterior.
Reality: There are a multitude of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection definitely can't provide all of the data needed.
Myth: Considering that 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 appraisal.
Myth: There's no point for consumers to even care about what the report contains so long as their lender is fine with the contents therein.
Reality: Only when consumers check out a copy of their appraisal can they verify 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 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 area.
Myth: The only reason someone would order an appraisal is if a home needs its value estimated in a lender-based sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and do perform a series of different 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 order a home inspection.
Reality: An appraisal report does not fulfill the same purpose as an inspection report. The purpose of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. A home inspector analyzes the condition of the property and its main components and reports these findings.