Appraisal myths debunked

It is required by legal agencies that a real estate appraiser must be state-licensed to write appraisal reports for federally-related real estate purchases in Texas. The law gives you the right to acquire a copy of your completed appraisal report from your lender after it has been provided. Contact us if you have any concerns about the appraisal process.

Myth: The value that is ascertained by the appraiser is required to be exactly the same as the market value.

Fact: While most states support the concept that assessed value equates estimated market value, this often is not the case. Generally when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.

Myth: The opinion of value of a house will differ depending upon if the appraisal is ordered for the buyer or the seller.

Fact: There is no personal interest on the part of the appraiser in the result of the report, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is conducted.

Myth: Market value should approximate replacement cost.

Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. The dollar amount needed to reconstruct a house is what shows the replacement cost.

Myth: There are specific methods that real estate appraisers use to find the cost of a house, such as the price per square foot.

Fact: There are many different ways that an appraiser will use to make an in-depth investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to undesirable facilities and the sales price of recently sold comparable properties.

Myth: When the economy is robust and the sales prices of homes are found to be appreciating by a certain percentage, the other houses in the vicinity can be expected to appreciate based on that same percentage.

Fact: Value appreciation of a certain house must be determined on an individualized basis, factoring in information on comparable homes and other relevant considerations. It makes no difference whether the economy is strong or terrible.

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Myth: The house's exterior is determinate of the actual price of the house; it is unnecessary to do an interior inspection.

Fact: There are a number of different factors that determine property value; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply examining the house from the outside.

Myth: Since you're the one coughing up the cash for the appraisal when applying for the loan to buy or refinance your house, you own the provided appraisal.

Fact: Legally, the appraisal report is owned by the lender unless the lender releases their interest in the appraisal. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be given one by their lending agency.

Myth: Home buyers need not worry about what is in their document so long as it exceeds the necessities of their lending company.

Fact: A consumer should definitely look through their appraisal report; there might be some questions or some concerns about the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing a great deal of data - including, but 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: Appraisals are ordered only to estimate house values in home sales involving mortgage-lending transactions.

Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: A house inspection serves the same purpose as an appraisal.

Fact: Appraisal reports are definitely not the same as a home inspection. The appraiser concludes on an opinion of value in the appraisal process and resulting appraisal. House inspectors will compose a report that will show the condition of the house and its major components and possible damage.