Appraisal myths & facts

By law, an appraiser must be state-licensed to offer appraisals for federally-related transactions. You also have the right to receive a copy of the finished appraisal from your lender. Contact us if you have any questions about the appraisal procedure.

Myth: Market value needs to be the same as the assessed value of the property.

Fact: It is probable that Texas, like most states, supports the idea that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.

Myth: The buyer or the seller often will have some pull in the value of the home depending upon for whom the appraiser is working.

Fact: The appraiser has no vested interest in the result of the appraisal report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: The replacement cost of the house should be is on par with the market value.

Fact: The way market value is arrived at is based on what a home buyer would be willing to pay a willing seller for a home without being under duress from any outside group to purchase or sell. Replacement value is the dollar amount required to reconstruct a house in-kind.

Myth: Certain formulae, such as the price per square foot of the property, are the methods appraisers use to determine the worth of a property.

Fact: An appraisal is an amalgamation of data based on the home's size, location, proximity to specific facilities, the condition of the property and the cost of recent comparable sales. You can depend on Appraisal Professionals's staff to be forthright in assessing this information.

Myth: As properties appreciate by a certain percentage - in a robust economic state - the houses around the appreciating properties are expected to increase by the same amount.

Fact: Price appreciation of a certain house is always concluded on a case-by-case basis, factoring in data on comparable houses and other relevant considerations. It doesn't matter if the economy is on the rise or declining.

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Myth: You can usually tell what a home is worth simply by looking at the exterior.

Fact: There are a number of different factors that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be derived just by inspecting the property from the outside.

Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.

Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the report. However, consumers have to be provided with a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the report so long as it meets the needs of their lending company.

Fact: It is a very good idea for consumers to peruse a copy of their appraisal so that they can double-check the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data stored in an appraisal that could be useful to the home buyer in the future, such as 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 region.

Myth: Appraisals are ordered only to assess building values in home sales involving mortgage-lending deals.

Fact: Based upon their qualifications and designations, appraisers can and do provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: You shouldn't need to get an appraisal if you order a home inspection.

Fact: Appraisal reports have almost nothing in common with a home inspection report. The appraiser decides upon an opinion of value in the appraisal process and resulting document. The point of a home inspector is to determine the condition of the property and its major components, then provide a report on these findings.