Myth: Market value will be similar to the assessed value of the property.
Reality: It is probable that New Mexico, like most states, supports the suggestion that the assessed value is the same as the market value; however, this is not often the case. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby homes are excellent examples of why the price can vary.
Myth: The value of a house will change depending upon whether the appraisal is conducted for the buyer or the seller.
Reality: The appraiser has no personal interest in the outcome of the appraisal and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is calculated, it should equal the replacement cost of the house.
Reality: The way market value is derived is based on what a buyer would likely pay a willing seller for a home without being under influence from any external party to buy or sell. The replacement cost is the dollar amount required to reconstruct a property in-kind.
Myth: Appraisers use a formula, such as a certain price per square foot, to conclude the value of a home.
Reality: An appraisal is an assertion of information based on the house's size, location, proximity to some facilities, the condition of the home and the values of recent comparable sales. You can rely on Paul James Appraisals, Inc.'s staff to be honest in assessing this information.
Myth: As properties increase in value by a certain percentage - in a robust economy - the properties in proximity are figured to increase by the same amount.
Reality: The appreciation of a certain home has to be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant specifications within the property itself. It doesn't matter if the economy is doing well or declining.
Myth: The home's exterior is determinate of the expected price of the home; there is no need to do an interior appraisal.
Reality: To conclude a genuine value beyond all doubt, an appraiser must assess the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this data from just looking at the house from the exterior.
Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance your house, you own the produced appraisal.
Reality: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the appraisal. However, home buyers have to be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the necessities of their lending agency.
Reality: A consumer should definitely read through their appraisal report; there might be some questions or some concerns about the accuracy of the inspection that must be addressed. 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, containing a great deal 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 vicinity.
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 agency.
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: A house inspection serves the same purpose as an appraisal.
Reality: A home inspection report has a completely different purpose than an appraisal report. The reason behind an appraisal is to arrive at an opinion of market value during the appraisal process and the production of the report. A home inspector determines the condition of the home and its major components and reports their findings.