Appraisal myths debunked

It is required by the government that a real estate appraiser needs to be state-licensed to produce appraisal reports for federally-supported home sales in Texas. Also by law, you are entitled to request a copy of the completed appraisal from your lender. Contact our professional staff if you have any questions about the appraisal procedure.

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

Fact: It could be that Texas, like most states, validates the common myth that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when properties in the area have not been reassessed for a prolonged period.

Myth: The buyer or the seller sometimes may have an impact on the value of the property depending upon for whom the appraiser is working.

Fact: The opinion of value of the home does not affect the payment of the appraiser; because of this, the appraiser has no preconceived interest in the opinion of value of the property. Obviously, he will conduct the task with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Any time market value is found, it should equal the replacement cost of the home.

Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under influence from any outside party to buy or sell. The dollar amount required to reconstruct a home is what constitutes the replacement cost.

Myth: There are specific methods that real estate appraisers use to determine the cost of a home, like the price per square foot.

Fact: There are many numerous calculations that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to certain facilities and the cost of recently sold comparable properties.

Myth: As homes increase their worth by a certain percentage - in a strong economy - the homes nearby are figured to appreciate by the same amount.

Fact: Any value at which an appraiser concludes in regards to a particular house is always personalized, based on certain factors concluded from the data of comparable homes and other considerations within the house itself. This is true in good economic times as well as poor.

Myth: The house's outside is determinate of the actual worth of the property; there is no need to do an interior appraisal.

Fact: To conclude an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on area, condition, improvements, amenities, and current market trends. An external inspection definitely can't provide all of the information needed.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance their home, they own their appraisal.

Fact: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the report. Due to the Equal Credit Opportunity Act, any consumer requesting a copy of the document must be given it by their lender.

Myth: Home buyers need not care about what is in their report so long as it satisfies the necessities of their lending agency.

Fact: Only if consumers check out a copy of their 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 a near perfect record for future reference, comprised of helpful and often-revealing 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 vicinity.