Appraisal myths & facts

It is required by legal agencies that a real estate appraiser needs to be state-licensed to perform appraisal reports for federally-related property transactions in Texas. You also have the right to demand a copy of the completed appraisal from your lending agency. Contact us if you have any questions about the appraisal process.

Myth: The value that is assessed by the appraiser will be the same as the market value.

Fact: This is not often the case; most states do support the suggestion that the assessed value is the same as market value, but not always. There are times when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the area have not been reassessed for a good length of time, it may vary wildly.

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

Fact: The appraiser has no vested interest in the result of the appraisal report and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: The replacement value of the property should be is on par with the market value.

Fact: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific home. Replacement value is the dollar amount required to reconstruct a house in-kind.

Myth: Specific methods, like the price per square foot of the property, are the methods appraisers use to ascertain the price of a house.

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

Myth: When the economy is strong and the cost of homes are found to be increasing by a certain percentage, the other properties in the proximity can be expected to appreciate based on that same percentage.

Fact: Price appreciation of a certain property must be determined on a case-by-case basis, factoring in information on comparable houses and other relevant elements. It makes no difference whether the economy is good or bad.

Myth: You can generally see what a home is worth simply by looking at the exterior.

Fact: There are a number of different variables that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just viewing the property from the exterior.

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

Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the document must be given it by their lending agency.

Myth: Consumers need not care about what is in their appraisal document so long as it exceeds the necessities of their lending institution.

Fact: A consumer should definitely inspect their appraisal report; there will probably be some questions or some worries with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal report that could be useful to the consumer 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 vicinity.