Myth: Assessed value should equate market value.
Reality: It is possible that Connecticut, like most states, validates the idea that the assessed value is no different from the market value; however, this is not often the case.
Interior remodeling that the assessor is unaware of and a dearth of reassessment on nearby homes are perfect examples of why the price can vary.
Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the value of the house will vary.
Reality: There is no vested interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, despite of for whom the appraisal is written.
Myth: Market value should equate to replacement cost.
Reality: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific house, with neither being under undue influence to buy or sell.
The dollar amount necessary to rebuild a home is what forms the replacement cost.
Myth: There are specific methods that appraisers use to determine the cost of a house, like the price per square foot.
Reality: Appraisers complete a comprehensive 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 properties.
Myth: When the economy is doing well and the sales prices of properties are found to be rising by a certain percentage, the other houses in the area can be expected to appreciate based on that same percentage.
Reality: An increase in value of a specific property has to be concluded on an individualized basis, factoring in information on comparable homes and other relevant considerations.
It makes no difference whether the economy is powerful or terrible.
Myth: You can generally see what a home is worth simply by looking at the exterior.
Reality: To conclude a concrete value beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends.
As you can see, none of these factors can be derived simply by examining the house from the outside.
Myth: Since you're the one paying for the appraisal when applying for your loan to buy or refinance your house, you own the ordered appraisal.
Reality: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the document.
Home buyers must be given a version of the report through request as per the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the needs of their lending company.
Reality: Only when home buyers read a copy of their report 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.
An report can double as a record for the future, as it contains a great deal 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a property during a sales transaction involving a lending company.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a variety of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is the same as a home inspection.
Reality: Appraisal reports have almost nothing in common with a home inspection report.
The task of the appraiser is to form an opinion of value in the appraisal process and through producing the report.
House inspectors will compose a report that will express the condition of the property and its major components and possible damage.
