Myth: Market value will be equivocal to the assessed value of the property.
Reality: It is probable that Louisiana, 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 remodeling has happened and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged period of time.
Myth: The opinion of value of a property will differ depending upon if the appraisal is produced for the buyer or the seller.
Reality: The appraised value of the house does not affect the payment of the appraiser; as such, the appraiser has no personal interest in the opinion of value of the home. This means that he will complete his task with impartiality and independence regardless of for whom the appraisal is provided.
Myth: Market value should mirror replacement cost.
Reality: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home.
The dollar amount demanded to reconstruct a property is what shows the replacement cost.
Myth: Certain methods, such as the price per square foot of the property, are the ways appraisers use to come to the value of a property.
Reality: Appraisers make a detailed analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: As houses increase in value by a certain percentage - in a strong economic state - the properties around the appreciating properties are expected to appreciate by the same amount.
Reality: The appreciation of a certain property is always concluded on a case-by-case basis, factoring in data on comparable houses and other relevant considerations.
This is true in strong economic times as well as poor.
Myth: You can usually see what a house is worth simply by looking at the exterior.
Reality: Home value is determined by a number of factors, including area, condition, improvements, amenities, and market trends.
As you can see, none of these variables can be derived simply by viewing the house from the exterior.
Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance your home, you own the ordered appraisal report.
Reality: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal.
Consumers have to be supplied with a copy of the report upon written request as per the Equal Credit Opportunity Act.
Myth: There's no point for consumers to even concern themselves with what the report contains so long as their lending agency is fine with the contents therein.
Reality: It is almost imperative for home buyers to look at a copy of their appraisal so that they can verify the accuracy of the document, in case it's required to question its accuracy. 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, since it contains an exorbitant amount of data - including, but certainly 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a house during a sales transaction involving a lending institution.
Reality: Depending upon their qualifications and designations, appraisers can and often do provide a lot of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you order a home inspection.
Reality: A home inspection report has a completely different purpose than an appraisal.
The appraiser finds an opinion of value in the appraisal process and resulting appraisal report.
A home inspector analyzes the condition of the building and its main components and reports these findings.