Common myths about appraising

Legally, a real estate appraiser is required to be state certified to write substantiated real estate appraisals for federally-supported sales. The law gives you the right to get a copy of your finished appraisal from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value will always be the same as to market value.

Fact: It could be that Texas, like most states, supports the common myth that the assessed value is the same as the market value; however, this is not always true. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an prolonged period of time.

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

Fact: The price of the home does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the worth of the home. What this means is he will provide task with impartiality and objectivity regardless for whom the appraisal is provided.

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

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a certain house, with neither being under pressure to buy or sell. If the property were rebuilt, the dollar amount necessary to do so would form the replacement cost.

Myth: There are specific ways that real estate appraisers use to find the value of a home, like the price per square foot.

Fact: There are many differing formulae that an appraiser will use to make a full analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable homes.

Myth: As homes appreciate by a specific percentage - in a strong economic state - the houses around the appreciating properties are expected to increase by the same amount.

Fact: Worth increase of a specific home must be concluded on an individualized basis, factoring in information on comparable homes and other relevant elements. This is true in excellent economic times as well as poor.

Myth: The house's exterior is determinate of the actual worth of the property; there is no need to do an interior appraisal.

Fact: House worth is determined by a multitude of variables, including location, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data necessary.

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

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

Myth: Consumers need not care about what is in their appraisal document so long as it meets the needs of their lending company.

Fact: It is almost imperative for consumers to check over a copy of their report so that they can verify the accuracy of the report, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, since it contains a great deal of information - including, but certainly 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 area.