Home Appraisal Myths

Is The Tax Assessed Value Equal To The Market Value?

While many states support the concept that assessed values represent estimated market value, this often is not the case when interior remodeling has occurred and the assessor is unaware of the improvements or when properties in the vicinity have not been reassessed for an extended period. Tax assessors just drive by the home in question once the first assessment has been completed. Appraisers perform an interior and exterior inspection of the home to supply to the financiers for the loan type needed such as a no doc loan, a stated income loan, a self employed mortgage, or a super jumbo loan. Many times the square footage noted in courthouse records is incorrect, due to changes or additions made over the years that have not been recorded.

Does The Tax Assessor Get A Copy Of The Appraisal Report To Base The Tax Assessment On The Stated Market Value For The Home?

The only person who gets a copy of the report is the lender, the homeowner, or the potential buyer. The assessor has no access to the appraisal report. The tax assessments are not based on these reports.

Does The Appraised Value Of A Property Vary, Depending On Whether The Appraisal Is Performed For The Buyer Or The Seller Or Whether It Is Conducted For A Refinance, Sale, Or Divorce?

The appraiser has no vested interest in the outcome of the appraisal and renders services with independence, objectivity, and impartiality for whomever the appraisal is conducted and no matter what the reason is for the appraisal.

Shouldn’t The Market Value Approximate Replacement Cost?

Market value is based on what a buyer would pay a seller for a particular piece of property in an open and fair market with neither being pressured to buy or sell. It is based upon comparable sales of similar property in the area. Replacement cost is the actual dollar amount required to reconstruct the same property.

Do Appraisers Use A Formula, Such As A Specific Dollar Per Square Foot To Determine The Value Of A Home?

Appraisers perform a detailed analysis of all factors pertaining to the value of a home. This includes location, condition, size, quality, proximity to facilities, and recent sale prices of comparable properties. The adjustments made are based on the market value for the various amenities the property contains. Therefore, if the market value is $25.00 per square foot for variance in size, that is the adjustment figure used for the property being appraised.

Can The Value Of Individual Properties In A Given Area Be Expected To Appreciate By That Same Percentage When The Sales Prices Of Homes In That Area Rise?

Appreciation of a specific property must be determined on an individual basis while factoring in data on comparable properties and what the subject property itself has to offer in comparison. This is true whether the market is healthy or not.

Do Owners Own The Appraisal Because Owners Many Times Pay For Appraisals When Applying For Loans To Purchase Or Refinance Their Homes?

The appraisal is legally owned by the lender; however, consumers must be given a copy of the appraisal report upon written request according to the Equal Credit Opportunity Act. If the homeowner requests their own appraisal for personal reasons, then of course they own that appraisal.

Do Homeowners Need To Be Concerned With The Contents Of The Appraisal Report If It Satisfies The Needs Of Their Lending Institution?

Homeowners should review a copy of their appraisal report to double check its accuracy. It is a valuable record for future reference, containing useful and often revealing information including the legal and physical description of the property, square footage measurements, comparable properties in the neighborhood, neighborhood description, and a narrative of current real estate activity and market trends in their neighborhood. You should always retain a copy of the appraisal in your records.

Is An Appraisal Is The Same Thing As A Home Inspection?

An appraisal does not serve the same purpose as an inspection. The appraiser forms an opinion of value in the appraisal process. A home inspector determines the condition of the home and its major components. Confusion exists sometimes as the appraiser does perform an inspection as they walk around the outside and inside of your home. They are not licensed or trained to perform the things that a home inspector does, which is the testing of all the major operating systems in your home. The appraisal is based upon the assumption that the major components of the home are operational and that there are no underlying conditions, which would influence value. This is why it is highly recommended that all potential homeowners and existing homeowners get a professional inspection when buying and prior to selling.