Appraisal myths debunked

It is required by legal agencies that a real estate appraiser is required to be state-licensed to create appraisal reports for federally-related real estate transactions in Texas. Also by law, you are entitled to demand a copy of the finished report from your lender. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value will always be equal to market value.

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. At times when interior remodeling has occurred and the assessor is not aware of the improvement or properties in the area have not been reassessed for a good length of time, it may vary wildly.

Myth: The buyer or the seller will have some pull in the value of the house depending upon for whom the appraiser is working.

Fact: There is no vested interest on the part of the appraiser in the result of the appraisal, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is created.

Myth: Any time market value is found, it should be similar to the replacement cost of the house.

Fact: Market value is based on what a willing buyer would likely pay a willing seller for a specific house, with neither being under pressure to buy or sell. The replacement cost is the dollar amount necessary to rebuild a house in-kind.

Myth: Specific methods, like the price per square foot, are the ways appraisers use to determine the worth of a house.

Fact: An appraisal report is an amalgamation of information based on the property's size, location, proximity to specific facilities, the condition of the property and the price of recent comparable sales. You can depend on Harper & Strickland, Inc.'s staff to be ethical in assessing this data.

Myth: In a powerful economy - when the costs of houses in a given county are found to be appreciating by a particular percentage - the worth of individual properties in the vicinity can be expected to appreciate by that same percentage.

Fact: Any cost at which an appraiser concludes concerning a specific home is always personalized, based on certain factors found from the data of comparable houses and other specifications within the property itself. This is true in excellent economic times as well as poor.

Myth: Just examining what the house looks like on the outside gives an excellent idea of its cost.

Fact: To conclude an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from just inspecting the home from the exterior.

Myth: Because 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, legally the appraisal is theirs.

Fact: Legally, the appraisal is owned by the lending company unless the lender relinquishes their interest in the appraisal. Because of the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given it by their lending agency.

Myth: There's no point for home buyers to even worry about what the report contains so long as their lending company is satisfied.

Fact: Only if consumers examine a copy of their appraisal 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 valuable record for future reference, comprised of useful 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.