Appraisal myths debunked

By law, an appraiser must be state-licensed to perform appraisals for federally-supported transactions. Also by law, you have the ability to demand a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.

Myth: The value that is ascertained by the appraiser is required to be the same as the market value.

Fact: It could be that Texas, like most states, supports the common myth that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby properties are perfect examples of why the price can vary.

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

Fact: The price of the home does not affect the payment of the appraiser; due to this, the appraiser has no preconceived interest in the value of the home. Obviously, he will render task with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Any time market value is found, it should be the same as the replacement cost of the property.

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 home. Replacement cost is the dollar amount necessary to rebuild a property in-kind.

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

Fact: An appraisal report is an assertion of information concluded from the home's size, location, proximity to undesirable facilities, the condition of the home and the cost of recent comparable sales. You can rely on Paradigm Appraisal Group, Inc's appraisers to be honest in assessing this data.

Myth: When the economy is on the rise and the value of properties are reported to be rising by a certain percentage, the other properties in the neighborhood can be expected to increase based on that same percentage.

Fact: Any worth at which an appraiser concludes concerning a specific property is always personalized, based on certain factors derived from the information of comparable properties and other considerations within the property itself. This is true in fair economic times as well as bad.

Myth: The home's exterior is determinate of the actual worth of the home; there is no need to do an interior inspection.

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

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their house, they own their appraisal report.

Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the report. Due the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be provided with it by their lender.

Myth: Consumers need not worry about what is in their appraisal report so long as it meets the requirements of their lending company.

Fact: A consumer should definitely look through their report; there may be some questions or some worries with the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes an invaluable record for future reference, filled with helpful and often-revealing information - including 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 area.