Common myths about appraising
It is mandated by the government that an appraiser is required to be state-licensed to produce appraisal reports for federally-related property transactions in Texas. The law allows you to get a copy of your completed report from your lender after it has been provided. Contact our professional staff if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser will be exactly the same as the market value.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended time.
Myth: Depending on if the appraisal is written for the buyer or the seller, the cost of the house will vary.
Fact: The appraiser has no vested interest in the outcome of the appraisal and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will be the same as replacement cost.
Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. The dollar amount required to reconstruct a home is what constitutes the replacement cost.
Myth: There are specific methods that appraisers use to show the cost of a property, such as the price per square foot.
Fact: Appraisers complete an exhaustive analysis of all factors in consideration to the value of a home, including its location, condition, size, proximity to facilities and recent worth of comparable homes.
Myth: As homes increase their worth by a certain percentage - in a robust economy - the properties in proximity are figured to increase by the same amount.
Fact: Value increase of a certain home is always determined on an individualized basis, factoring in information on comparable properties and other relevant considerations. This is true in strong economic times as well as poor.
Have other questions about appraisers, appraising or real estate in Denton County or Denton, TX?Contact LHC Appraisals
Myth: You can generally find what a house is worth simply by looking at the exterior.
Fact: To conclude an accurate value beyond all doubt, an appraiser must inspect 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 derived just by examining the house from the outside.
Myth: Because the consumer is the person who puts up the capital to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal. Consumers must be provided with a version of the appraisal report upon written request due to the Equal Credit Opportunity Act.
Myth: It doesn't concern consumers what's in the report so long as it meets the necessities of their lender.
Fact: A home buyer should definitely inspect their document; there could be some questions or some concerns about the accuracy of the appraisal report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, comprised of useful 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 area.
Myth: Appraisers are hired only to assess house values in home sales involving mortgage-lending deals.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a multitude of different services including - but 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: A home inspection report serves a completely different purpose than an appraisal report. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. A home inspector analyzes the condition of the building and its major components and reports these findings.
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