Myth: Assessed value should be the same as market value.
Reality: It is possible that Indiana, like most states, validates the common myth that the assessed value is the same as the market value; however, this is not often the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an extended period.
Myth: The appraised value of a house will differ depending upon if the appraisal is ordered for the buyer or the seller.
Reality: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value will equate to replacement cost.
Reality: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. The replacement cost is the dollar amount needed to rebuild a property in-kind.
Myth: There are certain ways that appraisers use to determine the opinion of value of a house, like the price per square foot.
Reality: An appraisal is an assertion of information based on the property's size, location, proximity to some facilities, the condition of the home and the values of recent comparable sales. You can count on Brooks Appraisal Services's staff to be professional in assessing this information.
Myth: When the economy is robust and the sales prices of homes are reported to be appreciating by a certain percentage, the other properties in the area can be expected to increase based on that same percentage.
Reality: All increase of value is on a case-by-case basis, found by data on relevant elements and the data of comparable houses. This is true in excellent economic times as well as poor.
Myth: Just looking at what the house looks like on its exterior gives a good idea of its value.
Reality: To determine a conclusive value beyond all doubt, an appraiser must examine the house on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found simply by inspecting the home from the outside.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance real estate, they legally own their appraisal.
Reality: Unless a lender releases its vestment in the report, it is legally owned by the lending agency that purchased the appraisal. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be provided with one by their lender.
Myth: Home buyers need not care about what is in their appraisal report so long as it exceeds the requirements of their lending agency.
Reality: A home buyer should definitely look through their report; there may be some questions or some concerns with the accuracy of the appraisal report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in a report that should be useful to the home buyer 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 house needs its value assessed in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a variety 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.
Reality: A home inspection report has a completely different purpose than an appraisal. An appraiser forms an opinion of value in the appraisal process and resulting report. The point of a home inspector is to approximate the condition of the house and its major components, then write a report on these inspection.