Common myths about appraising
It is required by legal agencies that an appraiser needs to be state-licensed to perform appraisals for federally-supported real estate sales in Texas. Also by law, you are entitled to request a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Assessed value should always equate to 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. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are prime examples of why this occurs.
Myth: The buyer or the seller often will have leverage in the value of the house depending upon for whom the appraiser is working.
Fact: The opinion of value of the home does not affect the pay of the appraiser; due to this, the appraiser has no vested interest in the cost of the home. This means that he will render job with impartiality and objectivity regardless for whom the appraisal is created.
Myth: The replacement cost of the property is always is on par with the market value.
Fact: Without any suggestion from any external parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular property. If the property were reconstructed, the dollar amount necessary to do so would be the replacement cost.
Myth: Certain formulae, like the price per square foot, are the ways appraisers use to arrive at the value of a home.
Fact: There are many differing ways that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable houses.
Myth: As homes appreciate by a specific percentage - in a strong economic state - the homes around the appreciating properties are figured to increase by the same amount.
Fact: Price increase of a certain property must be concluded on an individualized basis, factoring in data on comparable houses and other relevant elements. It makes no difference if the economy is robust or terrible.
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Myth: Just seeing what the home looks like on the outside gives a good idea of its worth.
Fact: To determine an accurate value beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. An exterior inspection definitely can't provide all of the information required.
Myth: Because consumers pay for appraisal reports when applying for loans to buy or refinance real estate, they legally own their appraisal.
Fact: Legally, the appraisal is owned by the lending company unless the lender relinquishes their interest in the document. Home buyers must be provided with a copy of the report through 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 requirements of their lender.
Fact: Only if home buyers look at a copy of their appraisal 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. An appraisal report can double as a record for the future, as it contains an incredible amount of data - 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 proximity.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the value of a property during a sales transaction involving a lender.
Fact: Based upon their qualifications and designations, appraisers can and often do provide a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You shouldn't need to get an appraisal if you have had a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal report. The task of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. The purpose of a home inspector is to assess the condition of the property and its major components, then write a report on their inspection.
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