Myth: The value that is ascertained by the appraiser must be the same as the market value.
Reality: It could be that Tennessee, like most states, supports 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 does not know about the improvements, or when homes in the vicinity have not been reassessed for an extended period.
Myth: The buyer or the seller will have impact in the cost of the property depending upon for whom the appraiser is working.
Reality: The appraiser has no personal interest in the result of the report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Reality: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific property.
Replacement value is the dollar amount necessary to rebuild a house in-kind.
Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to ascertain the value of a home.
Reality: Appraisers complete an exhaustive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable homes.
Myth: In a robust economy - when the values of houses in a given county are found to be appreciating by a certain percentage - the values of individual properties in the proximity can be expected to rise by that same percentage.
Reality: The appreciation of a specific property is always concluded on a case-by-case basis, factoring in information on comparable homes and other relevant elements.
This is true in robust economic times as well as poor.
Myth: Just seeing what the property looks like on the outside gives an idea of its value.
Reality: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from just viewing the home from the exterior.
Myth: Since you're the one paying for the appraisal report when applying for the loan to purchase or refinance real estate, you own the produced appraisal report.
Reality: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal report.
Under the Equal Credit Opportunity Act, any consumer requesting a copy of the report must be provided with it by their lending company.
Myth: There's no point for consumers to even worry about what the appraisal contains so long as their lending company is fine with the contents therein.
Reality: It is almost imperative for home buyers to look at a copy of their appraisal report so that they can double-check the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes an invaluable record for future reference, filled with useful and often-revealing data - 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending agency.
Reality: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't have to get an appraisal if you order a home inspection.
Reality: A home inspection report has a completely different purpose than an appraisal report.
The point of an appraisal report is to arrive at an opinion of market value during the appraisal process and the completion of the report.
A home inspector analyzes the condition of the home and its major components and reports their findings.
