Myth: Assessed value will always be equal to market value.
Reality: It might be that Kentucky, like most states, supports the suggestion that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule.
Interior reconstruction that the assessor is not aware of and a dearth of reassessment on nearby houses are prime examples of why this occurs.
Myth: Depending on whether the appraisal is produced for the buyer or the seller, the cost of the home will vary.
Reality: There is no personal interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, despite of for whom the appraisal is created.
Myth: Market value will equal replacement cost.
Reality: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home.
The replacement cost is the dollar amount necessary to reconstruct a house in-kind.
Myth: Appraisers use a calculation, like a specific price per square foot, to come to the value of a house.
Reality: There are many different ways that an appraiser will use to make an in-depth investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the values of recently sold comparable houses.
Myth: In a strong economy - when the prices of houses in a given neighborhood are reported to be rising by a certain percentage - the prices of individual houses in the proximity can be expected to rise by that same percentage.
Reality: An increase in value of a specific home has to be concluded on an individualized basis, factoring in information on comparable properties and other relevant elements.
It makes no difference whether the economy is strong or poor.
Myth: The home's exterior is determinate of the expected price of the property; it is unnecessary to do an interior inspection.
Reality: To determine a concrete value beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends.
An exterior inspection obviously can't provide all of the data required.
Myth: Because the consumer is the person who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Reality: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report.
Consumers must be given a copy of the document through request due to the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even care about what the report contains so long as their lender is satisfied.
Reality: A home buyer should definitely read through their report; there might be some questions or some concerns about the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
There is a wealth of information stored in a report that will probably 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: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a property during a sales transaction involving a lending company.
Reality: Appraisers can have many varied qualifications and designations which allow them to perform a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is no different than a home inspection.
Reality: Appraisal reports are completely different than a home inspection report.
The point of an appraisal report is to arrive at an opinion of market value during the appraisal process and the production of the appraisal.
House inspectors will create a report that will express the condition of the home and its major components and possible damage.
