Common myths about appraising
It is mandated by the government that a real estate appraiser needs to be state-licensed to produce appraisal reports for federally-supported property transactions in Texas. Also by law, you are entitled to demand a copy of the finished appraisal report from your lender. Contact us if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser should be the same as the market value.
Fact: While most states back the idea that assessed value approximates estimated market value, this commonly is not the case. Generally when interior remodeling has occurred and the assessor is unaware of the improvement or other homes in the area have not been reassessed for a good length of time, it may vary wildly.
Myth: The appraised value of a house will differ depending upon if the appraisal is produced for the buyer or the seller.
Fact: The appraiser has no personal interest in the outcome of the report and should conduct his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Any time market value is established, it should equal the replacement cost of the home.
Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific house, with neither being under undue influence to buy or sell. The dollar amount necessary to rebuild a property is what forms the replacement cost.
Myth: There are certain ways that real estate appraisers use to find the value of a home, like the price per square foot.
Fact: Appraisers complete a full analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent values of comparable houses.
Myth: In a robust economy - when the values of properties in a given county are reported to be increasing by a certain percentage - the prices of individual properties in the proximity can be expected to rise by that same percentage.
Fact: Any price at which an appraiser arrives in regards to a certain house is always individualized, based on certain factors concluded from the information of comparable houses and other specifications within the house itself. It makes no difference if the economy is robust or poor.
Have other questions about appraisers, appraising or real estate in Potter / Randall County or Amarillo, Texas?Contact us
Myth: The home's exterior is determinate of the actual worth of the home; there is no need to do an interior inspection.
Fact: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data necessary.
Myth: Since you're the one providing the money for the appraisal when applying for your loan to purchase or refinance real estate, you own the ordered appraisal.
Fact: Unless a lending agency releases its interest in the appraisal report, it is legally owned by the lending agency that purchased the appraisal. However, consumers must be supplied with a copy of the report upon written request, because of the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the needs of their lending company.
Fact: A consumer should definitely look through their report; there could be some questions or some worries about the accuracy of the report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained in an appraisal report that should 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the cost of a home during a sales transaction involving a lending company.
Fact: Depending upon their qualifications and designations, appraisers can and often do perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal report is no different than a home inspection.
Fact: An appraisal does not serve the same purpose as an inspection. The purpose of the appraiser is to form an opinion of value in the appraisal process and through creating the report. House inspectors will write a report that will show the condition of the property and its major components and possible damage.