Appraisal myths debunked
It is required by the government that an appraiser must be state-licensed to offer appraisal reports for federally-related home transactions in Texas. You are also entitled by law to request a copy of the completed appraisal from your lender. Contact Anderson Appraisal, LLC if you have any concerns about the appraisal procedure.
Myth: The value that is assessed by the appraiser will be the same as the market value.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby properties are excellent examples of why there might be a differential in price.
Myth: The buyer or the seller will have impact in the cost of the house depending upon for whom the appraiser is working.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is created.
Myth: The replacement value of the house will be is on par with the market value.
Fact: Without any influence from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular home. Replacement value is the dollar amount required to reconstruct a house in-kind.
Myth: Appraisers use a formula, like a specific price per square foot, to come to the worth of a home.
Fact: Appraisers make a comprehensive analysis of all factors pertaining to the price of a property, including its location, condition, size, proximity to facilities and recent worth of comparable houses.
Myth: When the economy is on the rise and the worth of homes are found to be appreciating by a certain percentage, the other properties in the proximity can be expected to increase based on that same percentage.
Fact: Any value at which an appraiser concludes in regards to a particular home is always individualized, based on certain factors found from the data of comparable properties and other considerations within the property itself. This is true in good economic times as well as poor.
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Myth: Just examining what the property looks like on the outside gives an excellent idea of its value.
Fact: To find an accurate value beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found simply by examining the property from the outside.
Myth: Because consumers fund the appraisal when applying for loans to buy or refinance real estate, they legally own their appraisal.
Fact: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the appraisal. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be given one by their lending agency.
Myth: Consumers need not care about what is in their document so long as it exceeds the necessities of their lending agency.
Fact: Only if home buyers check out 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 report makes an invaluable record for future reference, comprised of useful and often-revealing information - including 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.
Myth: Appraisals are ordered only to estimate real estate property values in house sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a multitude 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: A home inspection report serves a completely different purpose than an appraisal. The reason behind an appraisal is to arrive at an opinion of fair market value during the appraisal process and the completion of the appraisal report. A home inspector analyzes the condition of the home and its major components and reports their findings.