Common myths about appraising

It is mandated by the government that a real estate appraiser is required to be state-licensed to perform appraisals for federally-related real estate sales in Texas. The law entitles you to get a copy of your completed report from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: Market value must be similar to the assessed value of the property.

Fact: While most states back the suggestion that assessed value is equal to estimated market value, this commonly is not the case. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby properties are perfect examples of why there might be a differential in price.

Myth: Depending on whether the appraisal is done for the buyer or the seller, the cost of the property will vary.

Fact: The price of the property does not affect the pay of the appraiser; because of this, the appraiser has no preconceived interest in the cost of the home. This means that he will provide job with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: The replacement cost of the home will be is on par with the market value.

Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a home without being under pressure from any outside party to buy or sell. If the house were reconstructed, the dollar amount required to do so would set the replacement cost.

Myth: There are specific methods that appraisers use to show the opinion of value of a home, like the price per square foot.

Fact: There are many differing calculations that an appraiser will use to make a comprehensive investigation of every factor in consideration of the home, such as the size, location, condition, how close it is to undesirable facilities and the value of recently sold comparable houses.

Myth: As houses increase their worth by a certain percentage - in a robust economy - the houses around the appreciating properties are figured to appreciate by the same amount.

Fact: Any price at which an appraiser concludes in regards to a certain house is always individualized, based on certain factors concluded from the data of comparable homes and other 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 actual worth of the home; it is unnecessary to do an interior inspection.

Fact: Home value is determined by a number of factors, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply inspecting the home from the outside.

Myth: Since the consumer is the party who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

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

Myth: There's no need for consumers to even concern themselves with what the appraisal report contains so long as their lender is fine with the contents therein.

Fact: It is very important for consumers to peruse a copy of their appraisal so that they can verify the accuracy of the document, in case they need to question its accuracy. 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 an incredible amount of information - 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.