Appraisal myths debunked
By law, an appraiser must be state-licensed to produce appraisals for federally-supported transactions. The law entitles you to get a copy of your finished appraisal report from your lender after it has been produced. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value will be similar to the assessed value of the property.
Fact: While most states back the concept that assessed value is equal to estimated market value, this usually is not the case. Interior remodeling that the assessor is not aware of and a lack of reassessment on nearby homes are perfect examples of why the price can vary.
Myth: The buyer or the seller will have leverage in the cost of the property depending upon for whom the appraiser is working.
Fact: The appraised value of the house does not affect the payment of the appraiser; due to this, the appraiser has no pressured interest in the opinion of value of the property. This means that he will render job with impartiality and independence regardless for whom the appraisal is created.
Myth: Market value should equate to replacement cost.
Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under pressure to buy or sell. The dollar amount necessary to rebuild a house is what shows the replacement cost.
Myth: Appraisers use a formula, such as a certain price per square foot, to figure out the cost of a house.
Fact: There are many differing methods that an appraiser will use to make a full analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable homes.
Myth: In a strong economy - when the costs of houses in a given neighborhood are found to be appreciating by a certain percentage - the worth of individual houses in the proximity can be expected to increase by that same percentage.
Fact: Any value at which an appraiser concludes concerning a certain home is always individualized, based on certain factors found from the information of comparable homes and other specifications within the home itself. This is true in good 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: Just looking at what the property looks like on the outside gives a good idea of its worth.
Fact: To determine an accurate worth beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data required.
Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance real estate, they legally own their appraisal report.
Fact: Unless a lender releases its interest in the appraisal report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be given a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it meets the needs of their lending company.
Fact: It is very important for consumers to go through a copy of their report so that they can verify the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable 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 vicinity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a property during a sales transaction involving a lending agency.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a variety 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 home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are definitely not the same as a home inspection. The point of an appraisal is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. A home inspector assesses the condition of the house and its main components and reports these findings.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.