Common myths about appraising

It is required by the government that an appraiser needs to be state-licensed to create appraisal reports for federally-related real estate purchases in Texas. The law entitles you to receive a copy of your completed report from your lender after it has been provided. Contact Texas Real Estate Office if you have any questions about the appraisal procedure.

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

Fact: While most states back the suggestion that assessed value is equal to estimated market value, this often is not the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when homes in the area have not been reassessed for an prolonged period.

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

Fact: The price of the house does not affect the payment of the appraiser; as such, the appraiser has no pressured interest in the opinion of value of the property. This means that he will render task with impartiality and independence regardless for whom the appraisal is provided.

Myth: Market value should be the same as replacement cost.

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a property without being under duress from any outside group to buy or sell. If the property were reconstructed, the dollar amount necessary to do so would be the replacement cost.

Myth: Appraisers use a calculation, such as a certain price per square foot, to come to the value of a house.

Fact: Appraisers complete a comprehensive analysis of all factors pertaining to the worth of a home, including its location, condition, size, proximity to facilities and recent worth of comparable homes.

Myth: As homes increase their worth by a certain percentage - in a robust economy - the houses nearby are expected to increase by the same amount.

Fact: All appreciation of worth is on an individual basis, found by information on relevant elements and the data of comparable properties. This is true in good economic times as well as bad.

Myth: Just seeing what the property looks like on its exterior gives a good idea of its cost.

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

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

Fact: Legally, the document is owned by the lender unless the lender releases their interest in the appraisal. Home buyers must be supplied with a copy of the report upon written request due to the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the needs of their lending agency.

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