Common myths about appraising

It is enforced by law that an appraiser is required to be state-licensed to write appraisals for federally-supported property sales in Texas. The law allows you to receive a copy of your finished report from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal process.

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

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 remodeling that the assessor is not aware of and a lack of reassessment on nearby homes are prime examples of why the price can vary.

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

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

Myth: The replacement cost of the home 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 likely pay a willing seller for a house without being under duress from any external party to purchase or sell. The dollar amount necessary to rebuild a house is what constitutes the replacement cost.

Myth: There are specific ways that appraisers use to determine the cost of a house, like the price per square foot.

Fact: Appraisers complete a detailed analysis of all factors in consideration to the cost of a property, including its location, condition, size, proximity to facilities and recent worth of comparable properties.

Myth: In a powerful economy - when the sales prices of houses in a given neighborhood are found to be increasing by a certain percentage - the worth of individual homes in the area can be expected to rise by that same percentage.

Fact: All increase of price is on an individual basis, concluded by data on relevant elements and the data of comparable properties. This is true in excellent economic times as well as bad.

Myth: Just looking at what the home looks like on its exterior gives an excellent idea of its cost.

Fact: House worth is concluded by a number of variables, including location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just examining the house from the exterior.

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

Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the appraisal. However, home buyers must be supplied with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.

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

Fact: It is a very good idea for consumers to check over a copy of their appraisal so that they can double-check the accuracy of the report, in case there is a need to question its accuracy. 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, as it contains 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.