Myth: Market value needs to be similar to the assessed value of the property.
Reality: It might be that Delaware, like most states, supports the idea that the assessed value equates to the market value; however, this is not always true.
Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.
Myth: The buyer or the seller may have leverage in the value of the property depending upon for whom the appraiser is working.
Reality: The value of the property does not affect the payment of the appraiser; due to this, the appraiser has no personal interest in the opinion of value of the house. Obviously, he will provide business with impartiality and objectivity regardless of for whom the appraisal is produced.
Myth: The replacement cost of the house should be on par with the market value.
Reality: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property.
The replacement cost is the dollar amount needed to rebuild a property in-kind.
Myth: Certain formulae, like the price per square foot, are the methods appraisers use to ascertain the value of a home.
Reality: Appraisers complete a full analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: As houses appreciate by a specific percentage - in a strong economy - the houses nearby are expected to increase by the same amount.
Reality: All appreciation of value is on a one-on-one basis, concluded by information on relevant considerations and the data of comparable properties.
This is true in strong economic times as well as poor.
Myth: You can commonly find what a property is worth simply by looking at the outside.
Reality: There are a number of different factors that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from just viewing the home from the exterior.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to buy or refinance your home, you own the ordered appraisal report.
Reality: The appraisal report is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document.
Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be provided with it by their lender.
Myth: It doesn't matter to consumers what's in the report so long as it meets the needs of their lending company.
Reality: Only when home buyers look through a copy of their appraisal 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.
There is a wealth of information stored in an appraisal report that can be useful to the consumer in the future, such as 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 region.
Myth: The only reason someone would order an appraisal is if a property needs its value assessed in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is the same as a home inspection report.
Reality: An appraisal does not fulfill the same purpose as an inspection.
An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report.
A home inspector assesses the condition of the home and its major components and reports their findings.
