Appraisal myths debunked

Legally, a real estate appraiser has to be state certified to perform substantiated appraisal reports for federally-supported purchase. Also by law, you are entitled to demand a copy of the completed appraisal report from your lender. Contact us if you have any concerns about the appraisal procedure.

Myth: Market value has to be equivocal to the assessed value of the property.

Fact: It is probable that Texas, like most states, validates the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule. There are times when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the neighborhood have not been reassessed for quite a while, it may vary wildly.

Myth: The appraised value of a house will be different depending upon if the appraisal is produced for the buyer or the seller.

Fact: The 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 house. This means that he will provide task with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Market value will approximate replacement cost.

Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular home. Replacement cost is the dollar amount needed to reconstruct a home in-kind.

Myth: There are certain methods that appraisers use to determine the value of a home, such as the price per square foot.

Fact: Appraisers complete a full analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.

Myth: In a robust economy - when the sales prices of houses in a given county are found to be appreciating by a particular percentage - the worth of individual properties in the proximity can be expected to rise by that same percentage.

Fact: Worth appreciation of a specific house must be concluded on a case-by-case basis, factoring in information on comparable homes and other relevant elements. It makes no difference if the economy is powerful or poor.

Myth: Just seeing what the property looks like on the outside gives an idea of its worth.

Fact: To find an accurate value beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. An exterior inspection obviously can't provide all of the information required.

Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the report. However, consumers have to be given a copy of the document upon written request, through the Equal Credit Opportunity Act.

Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it meets the needs of their lending agency.

Fact: Only if home buyers read a copy of their appraisal report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an invaluable record for future reference, containing 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 vicinity.