Appraisal myths debunked
By law, an appraiser must be state-licensed to produce appraisals for federally-related sales. You also have the right to acquire a copy of the finished report from your lender. Contact our professional staff if you have any questions about the appraisal process.
Myth: Assessed value should equate to market value.
Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the vicinity have not been reassessed for an extended period of time.
Myth: The opinion of value of a property will differ depending upon if the appraisal is produced for the buyer or the seller.
Fact: The value of the house does not affect the payment of the appraiser; as such, the appraiser has no preconceived interest in the cost of the home. This means that he will render task with impartiality and independence regardless for whom the appraisal is conducted.
Myth: Any time market value is established, it should be similar to the replacement cost of the home.
Fact: Market value is acquired by what a willing buyer would likely pay a willing seller for a specific house, with neither being under pressure to buy or sell. The dollar amount needed to rebuild a home is what forms the replacement cost.
Myth: Appraisers use a calculation, such as a specific price per square foot, to conclude the worth of a home.
Fact: Appraisers make a comprehensive analysis of all factors pertaining to the worth of a house, including its location, condition, size, proximity to facilities and recent costs of comparable houses.
Myth: When the economy is on the rise and the cost of houses are found to be rising by a certain percentage, the other homes in the neighborhood can be expected to increase based on that same percentage.
Fact: Any worth at which an appraiser concludes concerning a specific house is always individualized, based on certain factors concluded from the information of comparable houses and other considerations within the property itself. This is true in good economic times as well as bad.
Have other questions about appraisers, appraising or real estate in Brazoria County or Houston, TX?Contact our professional staff
Myth: The house's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior appraisal.
Fact: Home value is concluded by a multitude of variables, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from just looking at the property from the exterior.
Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal report is theirs.
Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the appraisal. However, home buyers must be provided with a copy of the appraisal report upon written request, due to the Equal Credit Opportunity Act.
Myth: Home buyers need not be concerned with what is in their report so long as it meets the requirements of their lending group.
Fact: Only if consumers read a copy of their appraisal report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, filled with helpful and often-revealing information - 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.
Myth: The only reason someone would order an appraisal is if a house needs its value assessed in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection.
Fact: Appraisal reports have almost nothing in common with a home inspection. An appraiser decides upon an opinion of value in the appraisal process and resulting document. House inspectors will create a report that will explain the condition of the home and its major components and possible damage.