Myth: Assessed value generally will equate market value.
Reality: It might be that Michigan, like most states, supports the suggestion that the assessed value equates to the market value; however, this is not often the case.
Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an extended period of time.
Myth: The buyer or the seller sometimes may have leverage in the cost of the property depending upon for whom the appraiser is working.
Reality: The cost of the home does not affect the payment of the appraiser; as such, the appraiser has no preconceived interest in the opinion of value of the home. This means that he will conduct task with impartiality and objectivity regardless of for whom the appraisal is provided.
Myth: Market value should mirror replacement cost.
Reality: Without any suggestion from any different parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home.
The dollar amount demanded to rebuild a house is what shows the replacement cost.
Myth: There are specific methods that appraisers use to determine the opinion of value of a house, such as the price per square foot.
Reality: There are many differing methods that an appraiser will use to make an in-depth investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the sales prices of recently sold comparable properties.
Myth: As properties appreciate by a specific percentage - in a strong economic state - the homes in proximity are expected to increase by the same amount.
Reality: The appreciation of a specific house must be determined on an individualized basis, factoring in information on comparable homes and other relevant considerations.
It makes no difference if the economy is powerful or on the decline.
Myth: The home's exterior is determinate of the expected price of the house; there is no need to do an interior inspection.
Reality: There are a number of different variables that show the value of a house; these factors include location, condition, improvements, amenities, and market trends.
There's no possible way to get all of this information from simply viewing the home from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance real estate, they own their appraisal.
Reality: The report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document.
Because of the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be given it by their lending company.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the requirements of their lending agency.
Reality: A consumer should definitely read through their document; there may be some questions or some concerns about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes a valuable record for future reference, filled with helpful and often-revealing information - including 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: Appraisers are hired only to assess building values in house sales involving mortgage-lending deals.
Reality: Hiring an appraiser can fulfill a variety of wants 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: There's no need to get an appraisal if you get a home inspection.
Reality: A home inspection report serves a completely different purpose than an appraisal.
An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report.
A home inspector analyzes the condition of the house and its major components and reports these findings.