Myth: Assessed value will always be the same as market value.
Reality: It is probable that Alabama, like most states, validates the common myth that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule.
Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an prolonged period.
Myth: The appraised value of a property will vary depending upon whether the appraisal is produced for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Any time market value is determined, it should be the same as the replacement cost of the home.
Reality: The way market value is found is based on what a buyer would be willing to pay a willing seller for a house without being under influence from any outside group to purchase or sell.
The dollar amount required to reconstruct a home is what shows the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to arrive at the value of a property.
Reality: Appraisers make a detailed analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable houses.
Myth: When the economy is on the rise and the sales prices of properties are reported to be rising by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.
Reality: Any value an appraiser reports concerning a specific house is always personalized, based on certain factors found from the information of comparable properties and other specifications within the home itself.
This is true in strong economic times as well as bad.
Myth: The home's exterior is determinate of the actual value of the house; it is unnecessary to do an interior appraisal.
Reality: To conclude a concrete value beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and current market trends.
Obviously, none of these factors can be derived just by examining the home from the outside.
Myth: Since the consumer is the one who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal is theirs.
Reality: Unless a lender releases its interest in the report, it is legally owned by the lending company that purchased the appraisal.
However, consumers have to be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: Home buyers need not care about what is in their appraisal document so long as it meets the necessities of their lending institution.
Reality: It is a very good idea for consumers to read a copy of their report so that they can double-check the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
An report can double as a record for the future, containing 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 house needs its value estimated in a lender sales transaction.
Reality: Appraisers can have many different qualifications and designations which allow them to perform a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: There's no need to get an appraisal if you get a home inspection.
Reality: A home inspection has a completely different purpose than an appraisal.
The job of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report.
A home inspector assesses the condition of the home and its major components and reports these findings.