Common myths about appraising
By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-backed transactions. The law entitles you to receive a copy of your completed appraisal report from your lending agency after it has been produced. Contact our professional staff if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser must be exactly the same as the market value.
Fact: It might be that Texas, like most states, validates the common myth that the assessed value is no different from the market value; however, this is not always true. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an extended time.
Myth: The appraised value of a home will differ depending upon if the appraisal is ordered for the buyer or the seller.
Fact: The appraiser has no vested interest in the result of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: The replacement value of the home is always is on par with the market value.
Fact: Without any suggestion from any external parties to buy 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 required to reconstruct a property in-kind.
Myth: There are specific methods that real estate appraisers use to determine the cost of a property, such as the price per square foot.
Fact: There are many differing ways that an appraiser will use to make a full analysis of every factor in consideration of the home, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable homes.
Myth: When the economy is doing well and the sales prices of properties are reported to be rising by a certain percentage, the other homes in the proximity can be expected to appreciate based on that same percentage.
Fact: Any price at which an appraiser arrives in regards to a certain house is always personalized, based on certain factors concluded from the information of comparable properties and other specifications within the home itself. This is true in fair economic times as well as poor.
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Myth: Just looking at what the house looks like on its exterior gives an idea of its value.
Fact: Property value is determined by a multitude of variables, including area, condition, improvements, amenities, and market trends. Obviously, none of these things can be found just by viewing the house from the outside.
Myth: Considering that the consumer is the party who provides the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal is theirs.
Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending company that ordered the appraisal. Consumers have to be provided with a copy of the appraisal report through request because of the Equal Credit Opportunity Act.
Myth: It doesn't mean anything to consumers what's in the appraisal report so long as it satisfies the necessities of their lending company.
Fact: A consumer should definitely read through their document; there could be some questions or some worries with the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing an exorbitant amount of 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 proximity.
Myth: Appraisers are hired only to assess house values in house sales involving mortgage-lending transactions.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a series of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: Appraisal reports are completely different than a home inspection. The point of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the production of the report. A home inspector assesses the condition of the home and its main components and reports their findings.