Common myths about appraising

It is mandated by legal agencies that a real estate appraiser needs to be state-licensed to perform appraisals for federally-related real estate transactions in Texas. Also by law, you have the right to request a copy of the completed report from your lender. Contact us if you have any questions about the appraisal procedure.

Myth: Market value must be similar to the assessed value of the property.

Fact: It might be that Texas, like most states, validates the idea that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Often when interior remodeling has occurred and the assessor is has not investigated the improvement or properties in the Fairview have not been reassessed for quite a while, it may vary wildly.

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

Fact: The value of the house does not affect the salary of the appraiser; because of this, the appraiser has no vested interest in the opinion of value of the house. What this means is he will complete his business with impartiality and objectivity regardless for whom the appraisal is created.

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

Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular property. The replacement cost is the dollar amount necessary to reconstruct a house in-kind.

Myth: There are certain methods that real estate appraisers use to show the opinion of value of a home, like the price per square foot.

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

Myth: In a robust economy - when the values of properties in a given neighborhood are reported to be appreciating by a certain percentage - the values of individual houses in the proximity can be expected to appreciate by that same percentage.

Fact: Any worth at which an appraiser concludes concerning a certain house is always personalized, based on certain factors concluded from the information of comparable homes and other specifications within the home itself. This is true in strong economic times as well as poor.

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

Fact: House worth is determined by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. An exterior inspection obviously can't provide all of the data necessary.

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

Fact: The document is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document. However, consumers have to be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even care about what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: It is very important for home buyers to check over a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a near perfect record for future reference, filled with useful and often-revealing 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 vicinity.