Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Reality: It could be that Oklahoma, like most states, supports the common myth that the assessed value equals the market value; however, this is not always true.
At times when interior remodeling has been done and the assessor is not aware of the improvement or other homes in the area have not been reassessed for years or more, it may vary widely.
Myth: The buyer or the seller often will have some pull in the cost of the property depending upon for whom the appraiser is working.
Reality: The price of the house does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the price of the home. Obviously, he will render services with impartiality and independence regardless of for whom the appraisal is produced.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Reality: Without any pressure from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house.
If the property were reconstructed, the dollar amount required to do so would set the replacement cost.
Myth: There are certain ways that appraisers use to find the opinion of value of a property, like the price per square foot.
Reality: Appraisers complete an exhaustive analysis of all factors in consideration to the value of a property, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: In a robust economy - when the prices of homes in a given region are found to be increasing by a certain percentage - the prices of individual properties in the area can be expected to appreciate by that same percentage.
Reality: Any value an appraiser derives concerning a certain home is always personalized, based on certain factors pulled from the data of comparable properties and other considerations within the house itself.
This is true in good economic times as well as bad.
Myth: You can commonly tell what a house is worth simply by looking at the outside.
Reality: Property value is concluded by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
Obviously, none of these things can be found simply by examining the house from the outside.
Myth: Since the consumer is the one who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Reality: Legally, the appraisal report is owned by the lender unless the lender relinquishes their interest in the document.
However, consumers must be given a copy of the appraisal report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the needs of their lending company.
Reality: Only when home buyers check out a copy of their appraisal 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.
There is an incredible amount of data stored in an appraisal that could 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 area.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the value of a property during a sales transaction involving a lender.
Reality: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: Appraisal reports have almost nothing in common with a home inspection report.
The point of an appraisal is to form an opinion of market value during the appraisal process and the production of the appraisal report.
House inspectors will create a report that will express the condition of the property and its major components and possible damage.