Appraisal myths debunked
It is mandated by the government that an appraiser is required to be state-licensed to perform appraisals for federally-supported home transactions in Texas. The law gives you the right to get a copy of your completed report from your lender after it has been provided. Contact LHC Appraisals if you have any concerns about the appraisal process.
Myth: Market value will always be equivocal to the assessed value of the property.
Fact: While most states support the idea that assessed value approximates estimated market value, this generally is not the case. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby properties are perfect examples of why the price can vary.
Myth: The buyer or the seller may have leverage in the value 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 result of the report, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is written.
Myth: Any time market value is established, it should be similar to the replacement cost of the house.
Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any external party to purchase or sell. The dollar amount demanded to reconstruct a house is what shows the replacement cost.
Myth: Appraisers use a formula, like a certain price per square foot, to arrive at the cost of a house.
Fact: Appraisers make an exhaustive analysis of all factors pertaining to the cost of a house, including its location, condition, size, proximity to facilities and recent worth of comparable homes.
Myth: In a strong economy - when the sales prices of properties in a given area are found to be rising by a certain percentage - the worth of individual properties in the proximity can be expected to appreciate by that same percentage.
Fact: Any price at which an appraiser concludes concerning a particular property is always individualized, based on certain factors pulled from the information of comparable houses and other considerations within the home itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Denton County or Denton, TX?Contact LHC Appraisals
Myth: You can generally see what a house is worth simply by looking at the exterior.
Fact: There are a multitude of different factors that conclude the value of a house; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be found just by viewing the house from the outside.
Myth: Since you're the one providing the money for the appraisal report when applying for the loan to purchase or refinance real estate, you own the produced appraisal.
Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the appraisal report. Under the Equal Credit Opportunity Act, any consumer requesting a copy of the appraisal report must be given one by their lending agency.
Myth: There's no reason for home buyers to even concern themselves with what the report contains so long as their lending company is satisfied.
Fact: A consumer should definitely inspect their document; there will probably 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 report that should be useful to the home buyer 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: The only reason someone would order an appraisal is if a house needs its price estimated in a lender-based sales transaction.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a series of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are completely different than a home inspection. The point of an appraisal report is to conclude upon 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 major components and reports their findings.
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