Myth: Assessed value generally will equate market value.
Reality: It could be that Wisconsin, like most states, validates the common myth that the assessed value equals the market value; however, this is not often the case.
Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when properties in the area have not been reassessed for an prolonged time.
Myth: Depending on if the appraisal is written for the buyer or the seller, the cost of the house will vary.
Reality: There is no personal interest on the part of the appraiser in the result of the report, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is created.
Myth: Market value will equate to replacement cost.
Reality: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific house, with neither being under duress to buy or sell.
The dollar amount required to reconstruct a house is what constitutes the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the value of a property.
Reality: There are many numerous ways that an appraiser will use to make a detailed analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the values of recently sold comparable properties.
Myth: In a strong economy - when the prices of houses in a given region are found to be rising by a particular percentage - the values of individual properties in the vicinity can be expected to increase by that same percentage.
Reality: All appreciation of value is on a case-by-case basis, concluded by data on relevant elements and the data of comparable houses.
This is true in strong economic times as well as bad.
Myth: You can generally tell what a home is worth simply by looking at the outside.
Reality: To find a definite value beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends.
An external inspection obviously can't provide all of the data needed.
Myth: Because consumers pay for the appraisal when applying for loans to purchase or refinance their home, they legally own their appraisal report.
Reality: Legally, the document is owned by the lender unless the lender relinquishes their interest in the appraisal.
However, consumers must be supplied with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it meets the necessities of their lending agency.
Reality: A home buyer should definitely read through their report; there will probably be some questions or some concerns about the accuracy of the analysis that must 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 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 proximity.
Myth: The only reason someone would hire an appraiser is if a property needs its value assessed in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and will perform a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is no different than a home inspection.
Reality: A home inspection serves a completely different purpose than an appraisal report.
The function of an appraisal report is to conclude upon an opinion of market value during the appraisal process and the production of the appraisal report.
The point of a home inspector is to find the condition of the home and its main components, then produce a report on these inspection.