Common myths about appraising

It is required by law that an appraiser needs to be state-licensed to offer appraisal reports for federally-related home purchases in Texas. Also by law, you have the ability to request a copy of the finished appraisal report from your lending agency. Contact us if you have any questions about the appraisal process.

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

Fact: While most states back the suggestion that assessed value approximates estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the appraised value of the house will vary.

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

Myth: Market value should equal replacement cost.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a particular property, with neither being under duress to buy or sell. The dollar amount needed to rebuild a property is what forms the replacement cost.

Myth: There are certain methods that real estate appraisers use to determine the opinion of value of a property, such as the price per square foot.

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

Myth: When the economy is strong and the worth of houses are found to be appreciating by a certain percentage, the other homes in the neighborhood can be expected to rise based on that same percentage.

Fact: Any worth at which an appraiser concludes in regards to a particular property is always personalized, based on certain factors concluded from the data of comparable houses and other considerations within the home itself. It doesn't matter if the economy is doing well or declining.

Myth: Just looking at what the house looks like on the outside gives an idea of its worth.

Fact: To find an accurate worth beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these factors can be derived simply by looking at the property from the outside.

Myth: Since you're the one paying for the appraisal when applying for your loan to purchase or refinance your house, you own the provided appraisal report.

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Due the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be provided with it by their lender.

Myth: There's no reason for home buyers to even worry about what the appraisal contains so long as their lending agency is fine with the contents therein.

Fact: Only if consumers check out a copy of their appraisal 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. There is an incredible amount of information stored in an appraisal that could be useful to the home buyer in the future, such as 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.