Myth: The value that is ascertained by the appraiser must be equivalent to the market value.
Reality: It is possible that South Carolina, like most states, validates the idea that the assessed value equates to the market value; however, this is not often the case.
Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby properties are prime examples of why this occurs.
Myth: The opinion of value of a property will vary depending upon whether the appraisal is conducted for the buyer or the seller.
Reality: The appraiser has no personal interest in the result of the appraisal report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: Market value should mirror replacement cost.
Reality: Market value is derived from what a willing buyer would likely pay a willing seller for a particular property, with neither being under pressure to buy or sell.
If the house were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a formula, such as a specific price per square foot, to come to the value of a home.
Reality: There are many varied methods that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable houses.
Myth: In a powerful economy - when the prices of houses in a given neighborhood are found to be increasing by a certain percentage - the prices of individual houses in the vicinity can be expected to appreciate by that same percentage.
Reality: The appreciation of a specific property is always concluded on an individualized basis, factoring in information on comparable houses and other relevant elements.
This is true in strong economic times as well as poor.
Myth: You can often see what a property is worth simply by looking at the exterior.
Reality: There are a multitude of different factors that show the value of a home; these factors include location, condition, improvements, amenities, and market trends.
There's no real way to get all of this data from simply inspecting the property from the exterior.
Myth: Since you're the one paying for the appraisal report when applying for your loan to purchase or refinance your home, you own the produced appraisal report.
Reality: Legally, the report is owned by the lender unless the lender releases their interest in the document.
By the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be provided with one by their lending agency.
Myth: There's no point for home buyers to even care about what the appraisal contains so long as their lender is satisfied.
Reality: It is almost imperative for home buyers to peruse a copy of their appraisal report so that they can verify 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.
An report can serve as a record for the future, containing an exorbitant amount 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 vicinity.
Myth: The only reason someone would order an appraisal is if a house needs its value estimated in a lender-based sales transaction.
Reality: Hiring an appraiser can fulfill a variety of needs 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: A house inspection serves the same purpose as an appraisal.
Reality: A home inspection has a completely different purpose than an appraisal report.
The job of the appraiser is to come to an opinion of value in the appraisal process and through creating the report.
The point of a home inspector is to find the condition of the home and its main components, then write a report on their findings.