Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related purchases. Also by law, you have the ability to receive a copy of the finished report from your lending agency. Contact Appraisal Professionals if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser should be equivalent to the market value.

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby houses are exact examples of why there might be a differential in price.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.

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

Myth: Market value should approximate replacement cost.

Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. Replacement value is the dollar amount necessary to rebuild a house in-kind.

Myth: There are certain methods that real estate appraisers use to find the value of a house, like the price per square foot.

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

Myth: When the economy is robust and the value of homes are reported to be increasing by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.

Fact: All increase of worth is on a case-by-case basis, determined by information on relevant considerations and the data of comparable houses. This is true in excellent economic times as well as poor.

Have other questions about appraisers, appraising or real estate in Hays County or Kyle, TX?

Contact Appraisal Professionals

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

Fact: To find an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from just viewing the home from the outside.

Myth: Since the consumer is the party who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal belongs to them.

Fact: The appraisal is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the report. Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the report must be given one by their lending company.

Myth: There's no point for home buyers to even care about what the report contains so long as their lending institution is fine with the contents therein.

Fact: Only if home buyers examine a copy of their report can they ensure its accuracy and possibly need to question the result. 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, since it contains an exorbitant amount 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: The only reason someone would hire an appraiser is if a house needs its value estimated in a lender sales transaction.

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

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

Fact: A home inspection report serves a completely different purpose than an appraisal report. The reason behind an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal. A home inspector assesses the condition of the home and its main components and reports their findings.