Myth: The value that is ascertained by the appraiser is required to be the same as the market value.
Reality: It is probable that Louisiana, like most states, validates the common myth that the assessed value equates to the market value; however, this is not always true.
Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an prolonged period.
Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the house will vary.
Reality: There is no real 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: Any time market value is determined, it should equal the replacement cost of the house.
Reality: Market value is derived from what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell.
The dollar amount necessary to reconstruct a property is what constitutes the replacement cost.
Myth: There are certain methods that appraisers use to show the value of a home, such as the price per square foot.
Reality: Appraisers make a detailed 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 houses.
Myth: As properties increase in value by a specific percentage - in a strong economy - the houses nearby are expected to appreciate by the same amount.
Reality: An increase in value of a certain property must be concluded on a case-by-case basis, factoring in data on comparable houses and other relevant specifications within the home itself.
This is true in excellent economic times as well as poor.
Myth: The property's outside is determinate of the actual value of the home; there is no need to do an interior appraisal.
Reality: Property value is concluded by a number of factors, including area, condition, improvements, amenities, and market trends.
As you can see, none of these factors can be derived simply by viewing the house from the outside.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their house, they legally own their appraisal report.
Reality: Unless a lender releases its interest in the document, it is legally owned by the lending agency that purchased the appraisal.
By the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given one by their lender.
Myth: There's no point for home buyers to even worry about what the appraisal contains so long as their lender is fine with the contents therein.
Reality: Only when consumers look at a copy of their appraisal 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.
Also, the report makes a valuable record for future reference, filled with helpful and often-revealing information - 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: The only reason someone would order an appraisal is if a house needs its value estimated in a lender sales transaction.
Reality: Based upon their qualifications and designations, appraisers can and do perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you get a home inspection.
Reality: An appraisal report does not serve the same purpose as an inspection report.
An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal.
The job of a home inspector is to approximate the condition of the property and its major components, then create a report on these findings.