Appraisal myths debunked

By law, an appraiser must be state-licensed to produce appraisals for federally-related transactions. The law allows you to receive a copy of your finished report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.

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

Fact: It could be that Texas, like most states, validates the idea that the assessed value equates to the market value; however, this is not always true. Sometimes when interior remodeling has been done and the assessor is has not investigated the improvement or other homes in the area have not been reassessed for quite some time, it may vary wildly.

Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the appraised value of the home will vary.

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

Myth: The replacement cost of the home is always is on par with the market value.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under undue influence to buy or sell. The replacement cost is the dollar amount needed to reconstruct a house in-kind.

Myth: There are specific methods that real estate appraisers use to find the cost of a house, such as the price per square foot.

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

Myth: In a robust economy - when the prices of properties in a given neighborhood are found to be increasing by a certain percentage - the costs of individual houses in the vicinity can be expected to increase by that same percentage.

Fact: Any worth at which an appraiser arrives in regards to a certain home is always individualized, based on certain factors derived from the information of comparable properties and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.

Myth: Just seeing what the property looks like on its exterior gives an idea of its worth.

Fact: There are a number of different variables that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. As you can see, none of these factors can be found just by looking at the house from the exterior.

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

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending company that purchased the appraisal. Consumers must be given a version of the appraisal report upon written request as per the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their document so long as it satisfies the necessities of their lending group.

Fact: It is almost imperative for home buyers to read a copy of their appraisal report so that they can verify the accuracy of the report, in case they need to question its accuracy. 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, containing 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 vicinity.