Appraisal myths debunked

Legally, an appraiser has to be state certified to write legitimate appraisal reports for federally-related purchase. You are also entitled by law to acquire a copy of the completed appraisal report from your lending agency. Contact Young Appraisal Company, Inc. if you have any concerns about the appraisal process.

Myth: Market value needs to be similar to the assessed value of the property.

Fact: It could be that Texas, like most states, validates the common myth that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an extended period of time.

Myth: Depending on whether the appraisal is provided for the buyer or the seller, the cost of the property will vary.

Fact: The price of the house does not affect the payment of the appraiser; because of this, the appraiser has no personal interest in the opinion of value of the property. What this means is he will complete his business with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Any time market value is found, it should equate to the replacement cost of the property.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a particular house, with neither being under duress to buy or sell. The replacement cost is the dollar amount required to reconstruct a house in-kind.

Myth: There are specific ways that appraisers use to show the opinion of value of a home, like the price per square foot.

Fact: There are many numerous formulae that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable properties.

Myth: When the economy is on the rise and the value of houses are reported to be appreciating by a certain percentage, the other houses in the vicinity can be expected to rise based on that same percentage.

Fact: All appreciation of value is on an individual basis, determined by data on relevant considerations and the data of comparable properties. This is true in strong economic times as well as poor.

Myth: Just examining what the property looks like on its exterior gives an excellent idea of its cost.

Fact: Property value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the data required.

Myth: Because consumers fund the appraisal when applying for loans to buy or refinance real estate, they own their appraisal.

Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Consumers have to be provided with a version of the report upon written request as per the Equal Credit Opportunity Act.

Myth: There's no reason for home buyers to even concern themselves with what the report contains so long as their lending agency is fine with the contents therein.

Fact: Only if consumers check out a copy of their appraisal can they ensure 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 appraisal makes a valuable record for future reference, filled with helpful 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 proximity.